A decentralized project to facilitate services like lending and borrowing using crypto assets

• Aave was started in 2017 by the name ETHLend, a decentralized project to facilitate services like lending and borrowing using crypto assets. The token involved was then called LEND.
• Later in 2018-19, during the crypto bear market, there was a lack of liquidity on the platform and the team worked on revamping the platform. In early 2020, ETHLend was rebranded as Aave protocol with efficient solutions to address the liquidity problems faced by ETHLend. Along with the protocol, the team introduced the AAVE token, which is the backbone of governance and a security collateral in the protocol.
• The Aave protocol also introduced a Safety Module (SI) and uses a liquidity pool to deal with liquidity issues. The safety module is a smart contract-based component where users can stake their AAVE token and get rewarded with safety incentives and fee distributions. Tokens staked in the SI will be used as a last resort in case of a shortfall, which is an event where the protocol lacks liquidity on the platform.
• Another interesting feature of the Aave protocol is the ability to choose an interest rate.