Aave
- Ticker
- AAVE
- Category
- DeFi governance token
- Risk profile
- Volatile
What it is
A decentralised lending protocol where deposits sit in shared pools and borrowers take overcollateralised loans against assets they lock, with interest rates set by how much of a pool is in use.
Why this risk level
- Loans are overcollateralised and enforced by contract: if the value of your collateral falls far enough relative to what you borrowed, anyone may liquidate part of the position and take a bonus for doing it
- Deposits are not insured — the risks are smart-contract failure, an oracle reporting a wrong price, and market moves too fast for liquidators to clear bad debt
- AAVE is a governance token used to vote on protocol parameters and to backstop the system under its safety module; it is not a deposit account and not a claim on the pools
A plain-English risk overview for education, not investment advice. Risk profiles describe the asset's own characteristics, not a price forecast — always do your own research before buying.
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