You can help expand this article with text translated from the corresponding article in German. (October 2025)Click [show] for important translation instructions.
View a machine-translated version of the German article.
Machine translation, like DeepL or Google Translate, is a useful starting point for translations, but translators must revise errors as necessary and confirm that the translation is accurate, rather than simply copy-pasting machine-translated text into the English Wikipedia.
Consider adding a topic to this template: there are already 1,805 articles in the main category, and specifying|topic= will aid in categorization.
Do not translate text that appears unreliable or low-quality. If possible, verify the text with references provided in the foreign-language article.
You must provide copyright attribution in the edit summary accompanying your translation by providing an interlanguage link to the source of your translation. A model attribution edit summary is Content in this edit is translated from the existing German Wikipedia article at [[:de:Aave]]; see its history for attribution.
You may also add the template {{Translated|de|Aave}} to the talk page.
Aave is a decentralized finance protocol (DeFi) that enables the lending and borrowing of cryptocurrencies without the involvement of intermediary financial institutions.[1][2][3][4] Users can deposit assets into so-called liquidity pools and, in return, receive interest or use these pools to take out loans.[5] Aave originated on the Ethereum blockchain. As of 22 June 2025, Aave is among the top 35 cryptocurrencies in terms of market capitalization.[6]
Aave was founded in 2017 under the name ETHLend by Stani Kulechov, a Finnish lawyer.[7] Originally, the project was based on a peer-to-peer lending model. In January 2020, the protocol was relaunched under the new name Aave (Finnish for 'ghost') with a liquidity pool model. The associated governance token carries the same name (AAVE) and allows holders to vote on protocol changes.[8]
In 2025, Kulechov visited Dublin to headline two separate conferences as part of Dublin Tech Week, ETH Dublin and Blockchain Ireland. At the time, the Aave lending protocol recorded €40.3 billion in net deposits.[9]
In February 2025, Bloomberg reported that Aave remained the largest decentralized finance lending platform by deposits.[10]
At the Reform UK conference in September 2025, Kulechov spoke alongside Zia Yusuf, the party's efficiency chief, as part of its push to embrace the cryptocurrency industry, which includes accepting donations in bitcoin.[11][12][13]
Functionality
Aave is permissionless and enables crypto lending and borrowing without users having to go through a central authority.[14] Users can deposit various cryptocurrencies—such as Ether, USDC, or DAI—into pools. These funds are then used as collateral for issuing loans.[15] In return, depositors receive variable interest earnings. Borrowers must provide collateral that exceeds the value of the loan.[8] Aave's automated market brings together buyers and sellers on the blockchain without the need for human intervention.[3]
A key feature of Aave is the ability to choose between variable and stable interest rates.[8] In addition, the protocol also supports flash loans—loans that must be taken out and repaid within a single block and are therefore suitable only for experienced developers.[1][15]
GHO stablecoin
In 2023, Aave announced the launch of its own decentralized, overcollateralized stablecoin called GHO. This stablecoin is backed by collateral deposited within the Aave protocol and is intended to expand the functionality of the network.[2]
Governance
Aave is an open-source project that is governed by a decentralized community of AAVE token holders.[14][1] Through a so-called DAO (Decentralized Autonomous Organization), changes to the protocol can be decided.[2] These include, for example, the approval of new assets or adjustments to risk parameters.[16]
Significance in the DeFi sector
Aave is a well-known lending protocol in the field of decentralized finance (DeFi).[14][1][3] It is regularly listed in industry analyses as one of the platforms with a high total value locked (TVL).[17][18]
Academic analysis
A 2024 working paper from the Bank for International Settlements discussed agents' motivations to engage in DeFi borrowing and lending activity, using granular transaction-level data from the Aave V2 protocol.[19]
A report by the Wharton Blockchain and Digital Asset Project (in collaboration with the World Economic Forum) describes Aave as a case study in the structure of decentralized lending protocols, with specific reference to its introduction of flash loans.[21][22]
A 2024 article published by the Stanford Journal of Blockchain Law & Policy discusses Aave's DAO-based decision-making process in the context of regulatory frameworks and decentralized system accountability.[23]
Further research has explored systemic resilience in DeFi lending, using Aave as an example to evaluate protocol design features such as collateral models.[24]
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
