Aave (AAVE) Live Price, Market Cap, Use Cases

Price

24h Change

Market Cap

24h Volume

Live data via /api/coingecko/markets · Updated every page load

Founded

2017

Founder

Stani Kulechov

Consensus

Token on Ethereum and many L2s

Max Supply

16,000,000

What AAVE is

Aave is a decentralized lending protocol that lets users deposit crypto as collateral to borrow other assets. It launched in 2020 (originally as ETHLend in 2017 before rebranding) and has grown into one of the largest DeFi protocols by total value locked. Lenders earn interest on deposits; borrowers pay variable interest rates determined by pool utilization. AAVE is the governance token of the Aave DAO.

How it works

Each Aave market accepts a list of supported assets. Users deposit and receive aTokens that auto-rebase to reflect accumulated interest. Borrowing requires posting collateral worth more than the borrowed amount (typical loan-to-value: 50-80%). If collateral value falls below a threshold, positions can be liquidated by anyone in exchange for a discount on the collateral. Interest rates float based on utilization: higher demand for borrowing pushes rates up, attracting more lenders.

Use cases

The dominant use case is leveraged trading and shorting: borrow stablecoins against ETH to buy more ETH (long leverage), or borrow ETH against stablecoins to short ETH. Other uses: yield farming (deposit a stablecoin earning yield, borrow another stablecoin and lend it elsewhere), institutional cash management, and flash loans (instant uncollateralized loans that must be repaid in the same transaction). Aave runs on Ethereum and most major L2s, with cross-chain functionality via CCIP and proprietary infrastructure.

Tradeoffs and criticism

Liquidation risk is the main user-facing risk: if collateral value drops while you have an open loan, your position can be liquidated, costing you a portion of the collateral. Smart contract risk applies to all DeFi. Interest rates can spike during demand surges, sometimes making positions unprofitable. AAVE governance has historically navigated complex risk parameters across many markets.

Where to track AAVE

See DeFi for the category context. DeFi TVL premium endpoint tracks Aave alongside other protocols.

Related coins

Frequently asked questions

What is the difference between depositing and lending?

In Aave, depositing IS lending: when you deposit USDC, you receive aUSDC tokens that earn interest. Other users can borrow that USDC by posting collateral.

What happens if my position gets liquidated?

A liquidator repays a portion of your debt and receives the equivalent collateral plus a discount (typically 5-10%). You keep the remaining collateral but lose the liquidation premium.

What are flash loans?

Flash loans are uncollateralized loans that must be borrowed and repaid in a single transaction. They are useful for arbitrage, collateral swaps, and refinancing without needing capital upfront. They are also the source of many DeFi exploits.