What is Aave (AAVE)?
Aave is a decentralized lending protocol whose roots go back to ETHLend, a peer-to-peer lending project founded by Stani Kulechov in 2017. It later rebranded to Aave and moved to pooled liquidity, and in 2020 holders migrated the old LEND token into AAVE at a rate of 100 to 1.
- Type
- DeFi lending governance token
- Launched
- 2020
- Consensus
- Secured by Ethereum
- Max supply
- 16 million AAVE
- Swap network
- Ethereum
- Sector (Messari)
- Lending
How Aave works
Suppliers deposit assets into shared pools and earn interest, while borrowers post collateral and borrow against it at rates that adjust with utilization. Positions that fall below required collateral levels can be liquidated, and AAVE holders govern risk parameters, listings and upgrades through the Aave DAO.
What AAVE is used for
Holders use AAVE to vote or delegate in Aave governance, and it can be staked to help backstop the protocol against shortfalls in exchange for rewards. It is also supplied as collateral and traded widely across DeFi.
AAVE supply
Total supply is 16 million AAVE, most of it created through the LEND migration and the rest held in an ecosystem reserve. The DAO has also used protocol revenue to buy back AAVE on the open market.
Before you swap AAVE
AAVE is an ERC-20 token on Ethereum, so you need ETH for gas to move it once it arrives in your wallet. If your AAVE is staked or supplied inside the protocol, withdraw it to a plain wallet balance before depositing it for a swap.