AAVE Protocol represents the cutting edge of decentralized finance, providing a sophisticated liquidity market protocol that enables users to participate as either depositors or borrowers in a completely decentralized and non-custodial manner. Depositors provide liquidity to the market to earn passive income, while borrowers can obtain loans through either overcollateralized or innovative undercollateralized methods.
Built on Ethereum and deployed across multiple Layer 2 solutions, AAVE Protocol has established itself as the gold standard for decentralized lending markets. The protocol's innovative features, including rate switching, credit delegation, and flash loans, have made it the preferred choice for both retail users and institutional participants seeking advanced DeFi strategies.
Seamlessly switch between stable and variable interest rates to optimize your borrowing costs or maximize deposit yields based on market conditions.
Access uncollateralized loans that must be borrowed and repaid within a single transaction block, enabling sophisticated arbitrage and trading strategies.
Delegate your credit line to trusted counterparties, enabling undercollateralized borrowing relationships while maintaining control over risk exposure.
Advanced gas-efficient smart contracts and batch transaction processing reduce costs for frequent protocol interactions and complex strategies.
Stake AAVE tokens in the Safety Module to backstop the protocol and earn staking rewards while providing an additional layer of security.
Access AAVE Protocol across Ethereum, Polygon, Avalanche, and other major networks with full feature parity and cross-chain compatibility.
Supply & Borrow
Stablecoin Market
Bitcoin on Ethereum
Governance & Utility
Connect any Web3 wallet like MetaMask, WalletConnect, or Ledger to access the AAVE Protocol interface and begin interacting with liquidity markets.
Deposit supported assets to start earning yield. Your supplied assets become available for borrowing while generating passive income through interest payments.
Use your supplied assets as collateral to borrow other tokens. Choose between stable and variable rates based on your risk tolerance and market outlook.
Monitor your health factor, utilization rates, and available borrowing power through the intuitive dashboard. Set up alerts for important position changes.
AAVE Protocol offers sophisticated features that appeal to advanced traders: Flash loans enable complex arbitrage strategies without collateral, credit delegation allows for undercollateralized borrowing relationships, and the ability to switch between stable and variable rates provides strategic flexibility. Additionally, the protocol's deep liquidity, multiple collateral options, and integration with other DeFi protocols create opportunities for sophisticated yield farming, leveraged positions, and risk management strategies that aren't available on basic lending platforms.
The AAVE Safety Module is a decentralized risk management feature where AAVE token holders can stake their tokens as a backstop for the protocol. In the event of a shortfall event (where borrowing exceeds available liquidity), staked AAVE tokens can be slashed to cover the deficit, protecting depositors. In return for taking this risk, stakers earn staking rewards and protocol fees. This creates a robust security mechanism that aligns the interests of token holders with the overall health of the protocol, providing an additional layer of protection beyond standard overcollateralization requirements.
Flash loans enable borrowers to access large amounts of capital without collateral, provided the loan is repaid within the same transaction. This unlocks several advanced strategies: Arbitrage opportunities across different DEXs, collateral swapping to avoid liquidation, self-liquidation to capture better rates, and complex DeFi strategy execution that would otherwise require significant capital. The only cost is a 0.09% fee on the borrowed amount, making flash loans an incredibly powerful tool for sophisticated traders and developers building advanced financial applications.
Credit delegation allows depositors to delegate their borrowing power to trusted third parties, enabling undercollateralized loans within the AAVE ecosystem. The process works as follows: A depositor supplies assets and earns yield as normal, but instead of keeping their borrowing capacity unused, they can delegate it to a specific address through a signed message. The delegate can then borrow up to the delegated amount without posting additional collateral. This feature enables real-world credit relationships, institutional lending, and more capital-efficient borrowing while maintaining the non-custodial nature of the protocol.
AAVE Protocol provides several institutional-grade risk management features: Loan-to-Value ratios are carefully calibrated for each asset, liquidation thresholds protect against undercollateralization, reserve factors ensure protocol solvency, and the Safety Module provides a backstop for extreme scenarios. Additionally, the protocol offers stable borrowing rates for predictable costs, health factor monitoring to prevent unexpected liquidations, and integration with risk management tools and analytics platforms. These features, combined with the protocol's extensive audit history and battle-tested codebase, make AAVE suitable for institutional adoption.
AAVE Protocol employs a sophisticated cross-chain strategy: The protocol is deployed natively on multiple networks including Ethereum, Polygon, Avalanche, and others, with each deployment featuring the full suite of AAVE functionality. Cross-chain bridges enable asset movement between networks, and the AAVE governance system coordinates protocol upgrades across all deployments. This multi-chain approach provides users with choice regarding transaction costs and network performance while maintaining consistent features and security standards. The protocol's architecture ensures that innovations and improvements can be deployed across all supported networks simultaneously.