Aave is a decentralized lending protocol that allows users to provide their crypto assets to a liquidity pool to earn interest or take loans against other tokens. It first emerged in 2017 as ETHLend and rebranded in 2018 to Aave, which translates from Finnish as 'ghost'.
Key opportunities:
Among the key features of Aave are instant loans without collateral (Flash Loans), aToken tokens that automatically accrue interest, and the ability to choose between fixed and floating rates. The protocol operates on multiple blockchains, including Ethereum, Polygon, Avalanche, Arbitrum, and Optimism.
Token $AAVE and its role:
The AAVE token is used for governance of the protocol: holders can vote on new assets, risk parameters, and functional updates. Its maximum supply is 16 million tokens, most of which are already in circulation. At the time of publication, the token has a market capitalization of over $4 billion, with a daily trading volume of around $786 million. The total value locked in the protocol (TVL) exceeds $33 billion.
Updates and innovations:
Aave V3 is the latest version of the protocol with optimized capital usage, cross-chain portals, and improved risk management. Aave has also launched its own stablecoin GHO, backed by crypto assets. One of the latest partnerships is the integration with Ink Foundation and the launch of a customized version of Aave V3 on Kraken L2.
Future forecasts:
In a bullish scenario, analysts predict that the price $AAVE could reach $300–450 in 2025–2027. In a neutral scenario, it is expected to be between $150 and $250, while in a bearish scenario, it may drop to $60–120. Successful implementation of GHO, further multichain expansion, and institutional support could solidify AAVE as one of the leaders in DeFi.
