Aave is a decentralised finance (DeFi) protocol that allows users to lend and borrow cryptocurrencies without intermediaries. It operates as a liquidity protocol, where users can deposit their assets into pools to earn interest or borrow against them with over-collateralisation.

Aave introduced innovative features like “flash loans,” which are loans taken and repaid within a single transaction, making it a unique offering in the DeFi space. The protocol also allows for rate-switching between stable and variable interest rates, giving borrowers flexibility.

The Aave ecosystem supports a wide range of assets and is integrated with multiple blockchains, including Ethereum, Polygon, and Avalanche. Its governance model enables AAVE token holders to propose and vote on protocol upgrades and changes, ensuring community-driven development.

AAVE, the protocol’s governance and utility token, provides holders with voting rights and fee discounts within the ecosystem. As an established participant on the DeFi platform, Aave continues to drive innovation and adoption in decentralised finance.