Aave is a decentralized lending protocol that allows users to lend and borrow cryptocurrency without an intermediary. Users deposit digital assets into liquidity pools, which are then converted into funds that the protocol can lend out.

They gain interest when they lend and pay interest when they borrow. It is based on the Ethereum Blockchain. The protocol is handled in a decentralized autonomous organization (DAO) manner. It is run and governed by the individuals who own and vote with AAVE tokens.

Aave also allows DeFi users to acquire flash loans, which lets users borrow a large amount of cryptocurrency without providing collateral and subsequently pay back the debt in the same transaction as long as they pay the one-block interest fee.