What is Aave (AAVE)?
Aave (AAVE) fact sheet with live price · reviewed November 4, 2026
Aave is the largest decentralized lending app in crypto: a set of smart contracts, mainly on Ethereum, where people deposit crypto to earn interest and borrow against their deposits, with no bank or company approving loans. AAVE is its governance token, which holders use to vote on the protocol's rules and stake as a backstop.
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Key facts
| Launched | 2017 as ETHLend; renamed Aave in 2018; lending protocol live since January 2020 |
|---|---|
| Created by | Stani Kulechov (now Aave Labs) |
| Governed by | Aave DAO: AAVE holders vote on changes |
| Type | Governance token (ERC-20) on Ethereum, bridged to other chains |
| Maximum supply | 16 million AAVE |
| Runs on | Ethereum plus many other networks, including Arbitrum, Base, Polygon and Avalanche |
| Latest version | Aave V4, live on Ethereum since March 30, 2026 |
Who runs it
The lending pools are smart contracts. Changes to them, such as which coins can be used and how much can be borrowed, are decided by votes of AAVE holders in the Aave DAO. Aave Labs, led by founder Stani Kulechov, writes most of the code and runs the main website and app, and outside risk firms advise the DAO.
What it's used for
Lenders deposit crypto such as USDC or ETH and earn interest paid by borrowers. Borrowers deposit collateral and take out a loan worth less than it, for example to get dollars without selling their ETH. Aave also has its own stablecoin, GHO. AAVE the token is used to vote and is staked as insurance against bad debt.
How it works
Every loan is over-collateralized: to borrow $500 you might deposit $1,000 of ETH. Interest rates move automatically with supply and demand. Prices come from Chainlink oracles. If your collateral's value falls and your "health factor" drops below 1, anyone can repay part of your loan and take some of your collateral at a discount. That's a liquidation, and it happens automatically, at any hour.
Where things stand (November 2026)
Aave V4 launched on Ethereum on March 30, 2026, with a shared liquidity "hub" and separate markets ("spokes") with their own risk rules. On April 18, 2026, attackers believed to be linked to North Korea stole about $292 million of Kelp DAO's rsETH, a staked-ETH token, and used it as collateral to borrow WETH on Aave V3. That left an estimated $124–230 million of bad debt, froze some markets and briefly made withdrawals impossible from fully borrowed pools. An industry recovery effort restored rsETH's backing, and WETH borrowing reopened on May 16–17, 2026. Separately, the SEC closed a four-year investigation into Aave without action in 2025.
Risks to know
- Smart-contract bugs, oracle failures or bad collateral can leave the protocol with bad debt, as the April 2026 rsETH incident showed.
- If a pool is fully borrowed, depositors may not be able to withdraw until borrowers repay or rates rise.
- Borrowers can be liquidated quickly in a price crash and lose part of their collateral.
- AAVE holders' votes and Aave Labs' decisions can change the rules.
- Fake Aave websites and "claim" links drain wallets; type the address yourself.
Buying and storing it
If you decide to buy, use a regulated exchange you reach directly, check fees with the true cost calculator, and store long-term holdings in a wallet you control, with the seed phrase written down offline. Read how to buy crypto safely. This page isn't a recommendation to buy.
Questions
Is Aave a bank?
No. It's software on a blockchain. Deposits aren't insured, and nobody checks your identity or credit; your collateral is the only guarantee.
Do I need AAVE tokens to use Aave?
No. You can lend and borrow without holding AAVE. The token is for voting and staking.
Can I lose money lending on Aave?
Yes. Bugs, hacks, bad debt or a stablecoin losing its peg can all cause losses, and a fully borrowed pool can delay withdrawals.
What is GHO?
Aave's own dollar stablecoin, minted by borrowers against their collateral.
Where to next
Sources
- Aave documentation
- Aave governance forum
- Aave launches V4 on Ethereum mainnet (KuCoin News, March 2026)
- The KelpDAO/LayerZero exploit and DeFi (Galaxy Research, April 2026)
- Aave restores WETH borrowing after Kelp DAO rsETH exploit (Cointelegraph, May 2026)
- Aave outlines 2026 roadmap after end of SEC probe (Cointelegraph)
Facts checked against the sources listed, as of November 4, 2026. Live price data by CoinGecko. Educational only; not financial advice. How we write and check pages.