From p2p lending to a leader in lending without intermediaries.
Aave — one of the flagships of decentralized lending. It all started with ETHLend — a p2p lending project created by Finnish developer Stani Kulechov in 2017. In 2020, it transformed into Aave (translated from Finnish as 'ghost') and became a true giant in DeFi.
The main idea of Aave is to allow users to borrow and lend cryptocurrency without intermediaries, through smart contracts. The user deposits tokens into a liquidity pool and earns interest, while another can take a loan by providing collateral.
How AAVE tokenomics works.
The AAVE token is used for governance of the protocol (voting).
Staking: holders can place AAVE in the Safety Module — a reserve that covers losses in case of bugs or force majeure.
For participating in the module — a reward in tokens.
AAVE also provides discounts on fees and priority access to new features.
Interesting fact: Flash Loans
One of the most innovative features of Aave — Flash Loans (instant loans). These are loans that need to be repaid within the same transaction.
They opened up a multitude of new opportunities:
-Arbitrage between DEXs
-Refinancing debts
-...and, unfortunately, attacks — because if you find a bug, you can steal millions in seconds.
Aave has become the foundational infrastructure of DeFi. It operates on Ethereum, Polygon, Avalanche, and other networks. And today — it is not just a lending protocol, but a whole ecosystem, including the stablecoin GHO, a mobile app, and in the future — a social layer (Lens Protocol).
Want a crypto loan without a bank? Aave is waiting.
