AAVE is the native cryptocurrency of the Aave decentralized finance (DeFi) platform.
Aave is a decentralized lending and borrowing platform built on the Ethereum blockchain. It allows users to lend their cryptocurrencies to earn interest or borrow assets by using their crypto as collateral.
Its flash loan feature has been particularly popular among DeFi traders and developers for its flexibility in executing complex transactions.
Flash loans and Liquidity Protocol
Aave also introduced the concept of flash loans, which are uncollateralized loans that allow users to borrow funds without providing any collateral as long as the borrowed amount is returned within the same transaction block. This feature enables various complex DeFi transactions and arbitrage opportunities.
Aave employs a unique interest rate model known as the “Liquidity Protocol,” where interest rates on loans dynamically adjust based on the demand and supply of assets in the protocol.
AAVE token
Aave’s native cryptocurrency is called AAVE.
AAVE token holders have governance rights and can participate in proposing and voting on protocol upgrades and changes.
Aave has a Safety Module, which allows AAVE token holders to stake their tokens as collateral to provide insurance against possible protocol vulnerabilities.
