What is Aave (AAVE) and what is it used for?

Aave is a decentralized finance (DeFi) protocol built on Ethereum that enables users to lend and borrow cryptocurrencies without intermediaries. Lenders deposit assets into liquidity pools to earn interest, while borrowers can take loans by providing collateral. AAVE is the native governance and utility token of the protocol, used for protocol upgrades, fee discounts, and staking. Holders can participate in governance proposals and potentially earn staking rewards by locking AAVE in the Safety Module, which adds an extra layer of security to the protocol. If you’re seeking passive income or more flexible borrowing options, Aave provides a mature and widely adopted DeFi option.

How does staking AAVE work and what are the benefits and risks?

Staking AAVE typically involves locking tokens into the protocol’s Safety Module (SM) to act as a reserve that can be burned to cover protocol shorts in extreme events. In exchange for this risk-bearing commitment, stakers may earn safety incentives and accrue governance rights. Benefits include enhanced security for the protocol and potential fee or reward incentives, plus a stronger voice in governance. Risks include the possibility of losing staked AAVE if the protocol incurs losses that require using the Safety Module, as well as price risk from holding a volatile asset. Always review current terms on the official Aave governance portal and only stake what you can afford to lock for the agreed duration.

What factors influence AAVE’s price and how can I assess its risk?

AAVE’s price is influenced by protocol usage, total value locked (TVL), overall DeFi adoption, market conditions, and tokenomics (including circulating supply vs. max supply). Positive catalysts include increased borrowing activity, new assets supported, or protocol improvements that reduce risk. Negative factors include competition from other DeFi lending protocols, security incidents, or adverse market moves that reduce liquidity. To assess risk, monitor metrics like TVL, number of active lenders/borrowers, borrowing rates, and the health of collateralization ratios across assets. Diversification and a clear understanding of the role of AAVE in governance and security modules help manage exposure.

Where can I buy and store AAVE safely, and what should I know about wallets and fees?

AAVE can be purchased on major centralized exchanges and most decentralized exchanges that list the token. For storage, choose wallets that support ERC-20 tokens and Aave’s governance features, such as popular hardware wallets (e.g., Ledger) and reputable software wallets (e.g., MetaMask with proper security practices). When transferring, be mindful of gas fees on Ethereum, which can vary with network congestion. Use secure wallet recovery phrases, enable two-factor authentication on exchange accounts, and consider using a hardware wallet for larger holdings. Always verify contract addresses and avoid phishing sites to protect your funds.

What are common use cases for AAVE beyond staking, and how does it interact with other DeFi protocols?

Beyond staking, AAVE’s governance token enables users to vote on protocol upgrades and risk parameters. The Aave protocol provides leverage-free borrowing and over-collateralized loans, flash loans, and liquidity mining opportunities. AAVE tokens also incentivize participation in governance and risk management. Interoperability with other DeFi protocols occurs through common ERC-20 standards and liquidity pools; AAVE often appears in yield farming, automated market maker (AMM) integrations, and cross-chain bridges via supported Layer 2 solutions or forks. Understanding these interactions helps users optimize liquidity, risk, and potential yield across ecosystems.

Aave (AAVE) Interest Rates

Compare Aave interest rates for lending, staking, and borrowing

$114.97

↑ 0.55%

Updated: February 24, 2026

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Updated Feb 24, 3:31 PM

Lending

12.00% APY

on YouHodler →

Staking

4.00% APY

on Nexo →

Borrowing

1.90% APR

on Nexo →

Comparing AAVE rates across 6 platforms to find you the best yields.

Best AAVE Lending Options

Highest Rate:YouHodler(12.00% APY)

Maximum yield currently available

Best Overall:Nexo(4.00% APY)

Regulated CeFi with insurance

Recommendations based on current rates, platform type, and trust factors. Always do your own research before investing.

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Frequently Asked Questions About Aave (AAVE) Interest Rates

What is Aave (AAVE) and what is it used for?: Aave is a decentralized finance (DeFi) protocol built on Ethereum that enables users to lend and borrow cryptocurrencies without intermediaries. Lenders deposit assets into liquidity pools to earn interest, while borrowers can take loans by providing collateral. AAVE is the native governance and utility token of the protocol, used for protocol upgrades, fee discounts, and staking. Holders can participate in governance proposals and potentially earn staking rewards by locking AAVE in the Safety Module, which adds an extra layer of security to the protocol. If you’re seeking passive income or more flexible borrowing options, Aave provides a mature and widely adopted DeFi option.
How does staking AAVE work and what are the benefits and risks?: Staking AAVE typically involves locking tokens into the protocol’s Safety Module (SM) to act as a reserve that can be burned to cover protocol shorts in extreme events. In exchange for this risk-bearing commitment, stakers may earn safety incentives and accrue governance rights. Benefits include enhanced security for the protocol and potential fee or reward incentives, plus a stronger voice in governance. Risks include the possibility of losing staked AAVE if the protocol incurs losses that require using the Safety Module, as well as price risk from holding a volatile asset. Always review current terms on the official Aave governance portal and only stake what you can afford to lock for the agreed duration.
What factors influence AAVE’s price and how can I assess its risk?: AAVE’s price is influenced by protocol usage, total value locked (TVL), overall DeFi adoption, market conditions, and tokenomics (including circulating supply vs. max supply). Positive catalysts include increased borrowing activity, new assets supported, or protocol improvements that reduce risk. Negative factors include competition from other DeFi lending protocols, security incidents, or adverse market moves that reduce liquidity. To assess risk, monitor metrics like TVL, number of active lenders/borrowers, borrowing rates, and the health of collateralization ratios across assets. Diversification and a clear understanding of the role of AAVE in governance and security modules help manage exposure.
Where can I buy and store AAVE safely, and what should I know about wallets and fees?: AAVE can be purchased on major centralized exchanges and most decentralized exchanges that list the token. For storage, choose wallets that support ERC-20 tokens and Aave’s governance features, such as popular hardware wallets (e.g., Ledger) and reputable software wallets (e.g., MetaMask with proper security practices). When transferring, be mindful of gas fees on Ethereum, which can vary with network congestion. Use secure wallet recovery phrases, enable two-factor authentication on exchange accounts, and consider using a hardware wallet for larger holdings. Always verify contract addresses and avoid phishing sites to protect your funds.
What are common use cases for AAVE beyond staking, and how does it interact with other DeFi protocols?: Beyond staking, AAVE’s governance token enables users to vote on protocol upgrades and risk parameters. The Aave protocol provides leverage-free borrowing and over-collateralized loans, flash loans, and liquidity mining opportunities. AAVE tokens also incentivize participation in governance and risk management. Interoperability with other DeFi protocols occurs through common ERC-20 standards and liquidity pools; AAVE often appears in yield farming, automated market maker (AMM) integrations, and cross-chain bridges via supported Layer 2 solutions or forks. Understanding these interactions helps users optimize liquidity, risk, and potential yield across ecosystems.

Aave AAVE News

February 23, 2026CoinDesk 20 performance update: AAVE gains 1.7% while index trades lower over weekend

Uniswap (UNI) joined Aave (AAVE) as a top performers, gaining 0.5% from Friday.

February 21, 2026Aave’s “Civil War” Claims First Casualty as Key Developer Walks Away

Core developer BGD will not renew its contract, deepening a governance dispute between Aave DAO and Aave Labs.

February 20, 2026CoinDesk 20 performance update: AAVE falls 3.3%, leading index lower

Bitcoin Cash (BCH), down 2.1% from Thursday, was also among the underperformers.

Platform	Action	Max Rate	Base Rate	Min Deposit	Lockup	US Access
Nexo	Go to Platform	4% APY	1% APY	—	30 days	Check terms
YouHodler	Go to Platform	12% APY	—	—	—	Not US
Gemini	Go to Platform	0.01% APY	—	—	—	US Available

Platform	Action	Max Rate	Base Rate	Min Deposit	Lockup	US Access
YouHodler	Go to Platform	12% APY	—	—	—	Not US
Gemini	Go to Platform	0.01% APY	—	—	—	US Available

Platform	Action	Best Rate	LTV	Min Collateral	US Access
Nebeus	Get Loan	10% APR	—	—	Not US
YouHodler	Get Loan	12% APR	—	—	Not US

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