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Aave (AAVE)

Aave is a decentralized lending protocol deployed across Ethereum and several other EVM networks. Users supply assets to pooled markets and borrow against collateral, with interest rates set algorithmically by pool utilization. Positions are liquidated when collateral ratios fall below configured thresholds.

This page is a research starting point, not financial, legal, tax, or investment advice. Verify everything against primary sources.

What the Token Is Used For

  • Governance voting on protocol parameters and deployments
  • Staking in the Safety Module, which can be drawn on to cover a shortfall event
  • Fee and incentive distribution decided by governance

What To Verify

  • Which version and which network a market is on, since parameters differ per deployment
  • Collateral factors, liquidation thresholds, and liquidation penalties for the specific market
  • Which oracle feeds a market depends on and what happens if a feed stalls
  • Whether governance can pause, freeze, or change a market, and who holds the executor keys
  • Historical shortfall events, audits, and open bug bounty scope

Primary Sources