1. Project Overview

AAVE is a decentralized lending protocol based on Ethereum, primarily providing peer-to-peer lending services with no collateral/over-collateralization, supporting multi-chain deployment, and is one of the leading projects in the DeFi lending space. The protocol uses on-chain smart contracts to automatically complete fund matching, interest rate adjustment, and liquidation mechanisms, without centralized intermediaries. Its native token AAVE is mainly used for protocol governance, staking rewards, and risk reserve provisions.

As of February 2026, AAVE has been deployed to mainstream public chains and Layer 2 networks such as Ethereum, Arbitrum, Optimism, and Polygon, supporting lending transactions for over 20 mainstream cryptocurrencies including BTC, ETH, USDC, and USDT. The core liquidation mechanism and interest rate model of the protocol have undergone multiple iterations, forming a mature risk control system.