Aave is a pioneering decentralized finance (DeFi) protocol that enables users to lend, borrow, and earn interest on cryptocurrency assets — all without relying on traditional banks or intermediaries. Since it's launch, Aave has become one of the most trusted and widely used platforms in the crypto lending space, offering innovative features and robust security for its global user base.
What is Aave?
Aave is a decentralized money market protocol where users can lend and borrow a wide range of cryptocurrencies. It operates on the Ethereum blockchain, using smart contracts to automate transactions and remove the need for a central authority or middleman. The protocol supports over 20 different crypto assets, including ETH, DAI, and USDC, with all lending and borrowing activity managed transparently on-chain.
The History and Origin of Aave
Aave’s journey began in November 2017 under the name ETHLend, founded by Stani Kulechov in Finland. ETHLend started as a peer-to-peer lending platform but faced liquidity and matching challenges during the 2018 bear market. In September 2018, the project rebranded to Aave — Finnish for “ghost” — reflecting its vision of transparent, open, and decentralized finance.
The AAVE token was introduced in October 2020, replacing the original LEND token at a 100:1 ratio, and marking the protocol’s move toward community governance.
How Does Aave Work?
Aave connects crypto lenders and borrowers through a system of liquidity pools:
- Lenders deposit crypto assets into Aave’s pools, earning interest in return.
- Borrowers provide collateral (in supported cryptocurrencies) to borrow other assets from these pools.
- All transactions are managed by Ethereum smart contracts, ensuring transparency and eliminating the need for Know Your Customer (KYC) checks.
Borrowers can only borrow up to the value of their posted collateral, and if their collateral value drops, the protocol may automatically liquidate it to protect lenders.
Key Features: Lending, Borrowing, and Flash Loans
The AAVE Token: Utility, Governance, and Stats
- Utility: AAVE is used for governance, fee discounts, and as a safety module to backstop the protocol in case of shortfalls.
- Governance: Holders propose and vote on changes to the protocol (Aave Improvement Proposals, or AIPs).
Who Founded Aave?
Aave was founded by Stani Kulechov, a Finnish entrepreneur and lawyer with a passion for technology and decentralized finance. Kulechov remains the CEO and a key thought leader in the DeFi space.
Common Uses and Popularity
People use Aave for:
- Earning passive income by lending crypto assets
- Borrowing against their crypto holdings without selling them
- Taking advantage of flash loans for arbitrage and DeFi strategies
- Participating in decentralized governance
Aave stands as a cornerstone of the DeFi ecosystem, offering secure, transparent, and innovative crypto lending and borrowing solutions. Whether you’re looking to earn yield, borrow against your assets, or participate in decentralized governance, Aave provides a robust platform trusted by millions worldwide.
Track Your Aave Holdings Effortlessly with Nansen Portfolio
Ready to take control of your Aave (AAVE) investments? With Nansen Portfolio, you can seamlessly track your Aave holdings — alongside all your other crypto assets — across multiple blockchains in one unified dashboard. Nansen’s powerful platform now fully integrates Aave data, giving you real-time insights into your portfolio performance, DeFi positions, and transaction history.
Why use Nansen Portfolio for Aave?
- Comprehensive Multi-Chain Support: Monitor Aave and 10+ other blockchains, ensuring you never miss a beat across your entire crypto portfolio.
- Real-Time Analytics: Access up-to-date on-chain data, wallet balances, and DeFi activity for Aave and beyond.
- Custom Alerts & Smart Money Tracking: Set alerts for major transactions and follow high-performing wallets within the Aave ecosystem.
- Easy Setup: Simply add your wallet address to the Nansen Portfolio dashboard and start tracking your digital assets instantly.
Get started today!
