Originally introduced as ETHLend in 2017, Aave was created as a decentralized peer-to-peer lending platform after it raised $16.2 million in an Initial Coin Offering (ICO).
They rebranded to Aave when they switched to a liquidity pool model and launched Aave Protocol in 2020—an open-source and non-custodial liquidity protocol where users can earn interest on deposits and borrow assets.
- Aave protocol is a decentralized, open-source, and non-custodial money market protocol.
- Depositors earn interest by providing liquidity to lending pools.
- Borrowers can obtain overcollateralized loans by using the liquidity from these pools.
- Like other DeFi platforms, such as Compound , deposits are tokenized as aTokens . These accrue interest in real-time.
- Aave Protocol supports more than 15 different assets, with a large selection of stablecoins.
- AAVE tokens are used for fee reductions and will also be used for governance rights at the protocol level for future smart-contract updates. AAVE tokens are also burnt from the fees collected from the Aave Protocol.
- Since January 2020, Aave protocol also offers undercollateralized solutions: flash loans allow developers to borrow instantly and easily without any collateral. These flash loans are designed to be integrated into other products and services.
Start Trading Now!
Download the Binance.US app here
This material has been prepared for general informational purposes only and should NOT be: (1) considered an individualized recommendation or advice; and (2) relied upon for any investment activities. All information is provided on an as-is basis and is subject to change without notice, we make no representation or warranty of any kind, express or implied, regarding the accuracy, validity, reliability, availability or completeness of any such information. Binance.US does NOT provide investment, legal, or tax advice in any manner or form. The ownership of any investment decision(s) exclusively vests with you after analyzing all possible risk factors and by exercising your own independent discretion. Binance.US shall not be liable for any consequences thereof.