AAVE is a decentralized, open-source, and non-custodial liquidity protocol built on Ethereum that allows users to lend, borrow, and earn interest on digital assets. Launched initially as ETHLend in 2017 by Stani Kulechov, it rebranded to AAVE in 2020. The protocol's key feature is its liquidity pools, where users deposit crypto to earn interest, while borrowers use their assets as collateral to obtain loans.
One of AAVE's most innovative tools is flash loans, which enable uncollateralized loans that must be repaid within the same transaction, popular for arbitrage opportunities and collateral swapping. AAVE also supports credit delegation, where users with collateral can delegate their borrowing power to other users, creating trustless credit markets.
The native AAVE token serves multiple functions, including governance for voting on AAVE Improvement Proposals (AIPs), staking to secure the platform, and earning rewards.
In July 2023, AAVE introduced GHO, a decentralized stablecoin that users can mint by over-collateralizing their assets. By October 2024, AAVE continues to evolve with the upcoming Aave V4, which will introduce features like automated treasury management, a new liquidation engine, and deeper GHO integration. The platform remains a leader in the DeFi space with significant Total Value Locked (TVL).
Above are only for introduction, not intended as investment advice.