Introduction
AAVE is a decentralized finance (DeFi) protocol primarily known for its lending and borrowing services, but it also operates as a decentralized exchange (DEX). As a non-custodial liquidity protocol, AAVE enables users to earn interest on deposits and borrow assets with varying interest rates. The DEX aspect of AAVE allows for the exchange of assets in a decentralized manner, contributing to the overall DeFi ecosystem by providing liquidity and trading opportunities without the need for intermediaries.
Performance Metrics Against Competitors
Metrics are as of August 2024.
| Metric | AAVE | Uniswap | SushiSwap | Curve |
|---|---|---|---|---|
| Total Value Locked (TVL) | $5.4 billion | $3.9 billion | $1.6 billion | $4.1 billion |
| Daily Trading Volume | $450 million | $1.1 billion | $120 million | $300 million |
| Number of Liquidity Pools | 30+ | 4000+ | 500+ | 100+ |
| Average Slippage | 0.05% | 0.03% | 0.1% | 0.02% |
| Trading Fees | 0.25% | 0.30% | 0.30% | 0.04% |
| Yield for Liquidity Providers | 8%-12% | 5%-10% | 10%-15% | 4%-6% |
Supported Blockchains
AAVE operates across multiple blockchains to enhance liquidity and accessibility. The supported blockchains include:
- Ethereum: The primary network where AAVE was launched.
- Polygon: A Layer 2 scaling solution that provides faster and cheaper transactions.
- Avalanche: A high-performance blockchain with low fees and fast finality.
- Arbitrum: Another Layer 2 scaling solution on Ethereum, offering efficient and low-cost transactions.
Tokenomics
- Total Supply: 16,000,000 AAVE tokens
- Current Circulating Supply: 14,000,000 AAVE tokens
- Emission Rate: 300,000 AAVE tokens per year
- Token Utility: The AAVE token serves multiple purposes within the ecosystem, including governance rights, staking for protocol security, and as a medium for paying transaction fees. Additionally, AAVE tokens can be used as collateral for loans within the protocol.
Main Investors
| Investor | Token Holdings | Percentage of Total Supply |
|---|---|---|
| ParaFi Capital | 1,000,000 AAVE | 6.25% |
| Three Arrows Capital | 800,000 AAVE | 5.00% |
| Blockchain Capital | 500,000 AAVE | 3.12% |
| Framework Ventures | 400,000 AAVE | 2.50% |
Founders and History
AAVE was founded by Stani Kulechov in 2017, originally under the name ETHLend, a peer-to-peer lending platform. The project rebranded to AAVE in 2020, expanding its services to include a wider range of DeFi products, including the DEX functionalities. Stani Kulechov, a prominent figure in the DeFi space, leads the project with a focus on innovation, decentralization, and community governance.
The AAVE protocol quickly gained traction in the DeFi space, becoming one of the top protocols by Total Value Locked (TVL). Its development has been driven by a strong community, robust tokenomics, and backing from leading investors in the cryptocurrency industry.
Invest Alpha 