Aave (AAVE) is the token of the largest lending protocol in DeFi — a decentralized 'bank' with no bank. Users deposit crypto to earn interest, and others borrow against collateral, all governed automatically by smart contracts with no company in the middle. It's one of DeFi's most trusted, battle-tested names, and it also issues its own stablecoin, GHO (a decentralized dollar you can mint by borrowing against your deposits). AAVE the token is used for governance (voting on how the protocol runs) and for staking in a 'safety module' that backs the system against shortfalls in exchange for rewards. Its supply is nearly fully issued (hard cap of 16 million).
Where it stands today: Aave dominates DeFi lending, controlling a large share (roughly 40-45%) of all lending value locked, with tens of billions in deposits. Its 2026 'V4' upgrade introduced a modular 'hub-and-spoke' design that shares liquidity across specialized markets (real-world assets, institutional lending, fixed-rate loans) without fragmenting it, with GHO positioned as the central settlement asset. GHO itself has grown and expanded across multiple chains. Its risk controls are strong, but DeFi's interconnected risks are real — in 2026 the KelpDAO exploit, where an attacker used stolen restaking tokens (rsETH) as collateral, left Aave with roughly $196 million in bad debt and a multi-billion-dollar drop in deposits, straining its safety-module backstop and raising the prospect that AAVE stakers could absorb losses. So today it's the entrenched blue-chip of DeFi lending, with real revenue, a growing stablecoin, and the strongest brand in its category.