Log in

Simply Explained

Simply Explained: Aave

Updated: Jul 25, 2024
Published: Jan 3, 2022
0
Share:

 Aave is a lending and borrowing system that allows users to borrow, lend, and earn interest on crypto assets, without the need for intermediaries.

Post Feature Image

Let's take a closer look at what Aave is and how to use it.

What is Aave?

Aave is a lending and borrowing protocol built on the Ethereum network, its governance token is the ERC-20 token AAVE. An ERC20 token is used for creating and issuing smart contracts on the Ethereum blockchain.

On Aave, the process is completely decentralised. The protocol runs on the Ethereum blockchain and uses smart contracts that allow a distributed network of computers to manage these assets. This means users don't need to put their trust in a middleman to manage their funds.

Users who wish to lend out their assets put them in a pool from which others can borrow. Through these lending pools, users can borrow or lend 17 different cryptocurrencies, including MANA and ETH.

It's important to note that borrowing on Aave is always against collateral and not credit. In the crypto world, collateral is the cryptocurrency asset pledged as a guarantee that the loan will be repaid.

How does it work? 

Put simply, Aave is a system of lending pools. Users can deposit the assets they want to lend, and these assets are then combined in a pool. Borrowers can draw from those pools if they want to take out a loan.

The future 

Aave is expanding into multiple chains, including Avalanche and Fantom, which are decentralised, permissionless, open-source smart contract platforms for DeFi apps. This movement will help the project maintain its position as one of the main contenders in the decentralised lending business.

Our Top Picks:

DOGWIFHAT

DOGWIFHAT

120,650%

SPX6900

SPX6900

17,000%

POPCAT

POPCAT

66,567%

PENDLE

PENDLE

5,002%

SOLANA

SOLANA

2,500%

HYPE

HYPE

1,740%

Don’t miss our next 100X

Trusted by 230K+ investors

What are the risks? 

However, as with any crypto project, it's not without risk. Aave's risk is if demand is not sustained on chains other than Ethereum, as the project is associated with the idea of "multi-chain."

What is Cryptonary's take on Aave

Aave is a solid contender in DeFi, and lending markets will likely remain one of the largest sectors in this system.

As of now, the token's economic model indirectly benefits holders through revenue, as there is a buy-and-burn mechanism. It derives value from its limited supply. The system uses revenue to remove (burn) cryptocurrency from circulation. The constant burning of tokens reduces the supply and is expected to increase the price if demand remains the same.

There is currently no direct fee-sharing in play, however, this could be and will likely be voted into existence by token holders in the future.

We believe AAVE will remain in the Top 100 assets for multiple years to come.

How to use Aave to borrow crypto and earn interest

Using Aave to borrow crypto and earn interest is simple. To get started, go to the app and connect your wallet. Then, select “deposit” and choose the asset you’re depositing. Then, decide the amount you wish to deposit and click continue.

Once you’ve finished your deposit, you have 3 options:

1. Keep your crypto in Aave’s liquidity to earn interest (this starts automatically after you’ve deposited)

2. Borrow crypto (the more you deposit as collateral, the more you can borrow)

3. Swap crypto through Aave swap

Disclaimer: NOT FINANCIAL NOR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make, and only you are accountable for the results.

100% Success Money Back Guarantee

If our approach doesn’t outperform the overall crypto market during your subscription, we’ll give you a full refund of your membership. No questions asked. For quarterly and monthly subscribers this is applicable once your subscription runs for 6 consecutive months.

Terms & Conditions apply

Star

Trusted by 300,000+ traders

Take your next step towards crypto success

Save 50%

$799/year

Get everything you need to actively manage your portfolio and stay ahead. Ideal for investors seeking regular guidance and access to tools that help make informed decisions.

VisaCardImageMsCardImageCoinbaseCardImageSolanaCardImage

For your security, all orders are processed on a secured server.

What’s included in Pro:

  • Success Guarantee, if we don’t outperform the market, you get 100% back, no questions asked

  • 24/7 access to experts with 50+ years’ experience

  • All of our top token picks for 2025

  • Our latest memecoins pick with 50X potential

  • On hand technical analysis on any token of your choice

  • Weekly livestreams & ask us anything with the team

  • Daily insights on Macro, Mechanics, and On-chain

  • Curated list of top upcoming airdrops (free money)

Our track record speaks for itself

With over 2.4M tokens and widespread misinformation in crypto, we cut
through the noise and consistently find winning assets.

/images/advertorial/corpcomm3.webp
/images/advertorial/corpcomm4.webp
/images/advertorial/corpcomm5.webp

Frequently Asked Questions

Yes. We've consistently identified winners across multiple cycles. Bitcoin under $1,000, Ethereum under $70, Solana under $10, WIF from $0.003 to $5, PopCat from $0.004 to $2, SPX blasting past $1.70, and our latest pick has already 200X'd since June 2025. Everything is timestamped and public record.

No. When we founded Cryptonary in 2017 the market was new to everyone. We intentionally created content that was easy to understand and actionable. That foundational principle is the crux of Cryptonary. Taking complex ideas and opportunities and presenting them in a way a 10 year old could understand.

Signal vs noise. We filter out 99.9% of garbage projects, provide data backed analysis, and have a proven track record of finding winners. Not to mention since Cryptonary's inception in 2017 we have never taken investment, sponsorship or partnership. Compare this to pretty much everyone else, no track record, and a long list of partnerships that cloud judgements.

We share highly sensitive, time-critical research. Once it's out, it can't be "returned." That's why membership is annual only. Crypto success takes time and commitment. If someone is not willing to invest 12 months into their future, there is no place for them at Cryptonary.

Yes. You will have 24/7 to the team that bought you BTC at $1,000, ETH at $70, and SOL at $10. Through our community chats, live Q&As, and member only channels, you can ask questions and interact directly with the team. Our team has over 50 years of combined experience which you can tap into every single day.

Daily. We provide real-time updates, weekly reports, emergency alerts, and live Q&As when the markets move fast. In crypto, the market moves fast, in Cryptonary, we move faster.

If our approach to the market doesn’t beat the overall crypto market during your subscription, we’ll give you a full refund of your membership fee. No questions asked. For quarterly and monthly subscribers this is applicable once your subscription runs for 6 consecutive months.

Recommended from Cryptonary
Passive income: 2 single-sided yields on SOL with up to 70% APY
PRO
Research Report
Passive income: 2 single-sided yiel...We came across two yield setups on Solana that just make sense: easy to run, strong returns, and ful...
7 min read
Oct 29, 2025
Altcoin Scanner: Daily Trading Ideas
PRO
Market Direction
Altcoin Scanner: Daily Trading Idea...The altcoin market is waking up. After weeks of quiet price action, momentum is shifting and several...
4 min read
Oct 28, 2025
BTC, ETH and More: Bullish Breakouts and Critical Resistance Tests
PRO
Market Direction
BTC, ETH and More: Bullish Breakout...The majors broke upside on positive macro news, now testing key resistances. Watch for bullish conti...
8 min read
Oct 27, 2025