AAVE is the native token of the Aave Protocol, a decentralized non-custodial platform that provides liquidity in the crypto market. Users can provide liquidity via smart contracts to Aave and earn attractive returns. In addition, they can also borrow crypto assets from Aave in an overcollateralized or undercollateralized manner.
Aave protocol originally started on the Ethereum blockchain but operates on additional blockchains. As of January 2023, it is the third largest DeFi platform on the Ethereum network. Aave also works on Ethereum Layer-2 networks such as Polygon, Optimism, Arbitrum, and other blockchains, such as Avalanche, Fantom, and Harmony.
The completely decentralized community-governed DeFi protocol leverages AAVE as its governance tokens. AAVE token holders enjoy voting rights on Aave Improvement Proposals (AIPs) submitted by other users, including what new assets to support in the platform and future upgrades to its features.
Users can also stake AAVE to contribute to securing the Aave platform, earning attractive interest in return for their efforts. The rewards earned by stakers include a portion of the fees generated by the Aave Protocol.
