Last Updated: May 13, 2024

Aave is a non-custodial lending protocol that allows users to earn interest on deposits and borrow assets with variable or stable interest rates. 


ETHLend, which rebranded to Aave, was founded by Stani Kulechov as a decentralized peer-to-peer lending platform on Ethereum. In January 2020, Aave transitioned from peer-to-peer lending to a liquidity pool lending model. Since 2020, Aave has expanded to deploy contracts on other platforms such as Optimism, Polygon, and Avalanche.


Launched in November 2017 as ETHLend, Aave  rebranded in September 2018. The AAVE native token originally named LEND launched in October 2020.

How does it work?

Aave connects crypto borrowers with lenders directly so that they don’t have to go through a middleman. As described in Aave’s whitepaper, to lend cryptocurrencies, lenders lock up their funds into a liquidity pool. That pool is secured by a smart contract which helps match lenders with borrowers without requiring a middleman. The liquidity pools can be used for flash loans where users don’t require collateral but borrowers need to repay their loan in the same transaction.

Smart contract audit links

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