Aave (AAVE)

About

Aave is a decentralized finance (DeFi) platform that facilitates lending and borrowing of cryptocurrencies. It operates primarily on the Ethereum blockchain, allowing users to lend and borrow various digital assets through automated smart contracts. Aave uses overcollateralized loans to ensure lender security, where borrowers must deposit collateral worth more than the amount they wish to borrow. This model eliminates the need for intermediaries, enabling direct transactions between lenders and borrowers. The native token of Aave, AAVE, plays a crucial role in governance and staking. Holders can participate in decision-making processes and earn interest by staking their tokens in the Safety Module. Aave also supports flash loans, which are short-term loans requiring no collateral and must be repaid within a single Ethereum transaction. The platform operates on multiple blockchains, including Polygon and Avalanche, offering diverse lending options and interest rates based on supply and demand.