The DeFi industry has given crypto participants many tools that let them earn on crypto and access financial support at the moment it’s most needed. Aave is a prime example of this trend.
Below, we explain what Aave is, how the platform works, and how much you can earn with it.
What Is Aave V3
Aave is a decentralized platform; “V3” indicates that the third generation is what’s currently available on the market. Thus, Aave V3 is the third generation of the eponymous decentralized platform.
The project’s roots date back to 2017. The platform initially operated under the name ETHLend. In 2018 it was renamed to Aave.
The project is one of the leaders in blockchain lending (a lending protocol). It ranks first by total value locked (TVL), with $34.1 billion. For comparison, Morpo, which is in second place, has a TVL of just $6.02 billion.
Aave in the top-10 DeFi lending protocols. Source: DeFi Lama
A spike in user activity on Aave has come specifically in 2025. At the time of writing, the platform is updating its all-time high TVL. This means that the project’s tools are in higher demand now than ever.
Aave TVL. Source: DeFi Lama
On Aave, you can borrow crypto and also earn by supplying loans.
Why Crypto Lending Matters
Lending protocols like Aave offer crypto participants quick access to liquidity. The lenders’ side is straightforward—they earn by issuing loans—but borrowers’ goals aren’t always as clear. There are many reasons. For example, a user may spot an investment opportunity but not have cash on hand to act on it. At the same time, they may not want to sell the crypto they hold. In this case, they can take out a loan secured by their assets, execute the trade, and later exit with a profit—without losing their own coins.
How Decentralized Loans Work
The entire Aave system is built on smart contracts that govern how protocol users interact—without third parties. Let’s look at the main ways to use it.
1) Lend on Aave
You deposit cryptocurrency into an Aave pool. A pool is a common “treasury” from which borrowers can take out funds at interest. The platform shares part of the interest income with suppliers—that is, the users who provide liquidity to the pool.
Step-by-step:
- Choose a network. Low-cost Layer-2 (L2) solutions are good for getting started.
- Prepare a wallet and gas funds. Install a wallet such as MetaMask or Rabby, top up your deposit, and add a small amount of the network’s native token to pay gas.
- Select an asset to deposit. Stablecoins or high-cap coins like ETH are safer. When choosing, look at the annual yield (Supply APY) and whether there are caps (limits).
- Connect your wallet to the Aave app and deposit the asset. You will receive aTokens—deposit tokens that automatically accrue interest.
- Monitor deposit rates and risks. Your income depends on borrower demand, which changes frequently.
2) Borrow on Aave
To take out a loan on the platform, you must post cryptocurrency as collateral. Against this collateral, the protocol will issue the funds you need.
Step-by-step:
- Prepare a wallet and gas funds. Install a wallet—MetaMask or Rabby will do—and top it up with the network’s native token to cover gas fees.
- Choose a network (market). To start, consider budget-friendly L2 networks.
- Supply collateral. In the Aave app, connect your wallet and deposit collateral funds. Enable “Use as collateral.”
- Borrow. Open the Borrow section, choose an asset and rate type: Variable or Stable. Enter an amount such that your Health Factor remains ≥ 1.3–1.5.
- Confirm the loan. Click Borrow and sign the transaction. The funds will arrive in your wallet.
- Repayment. In the Repay tab, repay partially or in full, or use Repay with collateral.
Loan statistics by asset and interest-rate information. Source: Aave website
What Loan Terms Does Aave V3 Offer
The lending protocol supports a wide range of cryptocurrencies. You can review the full list on the official website.
A portion of the list of coins you can supply and borrow on the platform
Loan and borrowing terms vary by asset. They depend on demand for each cryptocurrency and can change. Therefore, before choosing which coin to work with, carefully study the alternatives.
As of the time of writing, the most profitable asset to lend is EURC (4.3% APR). The lowest borrowing rate is available to osETH borrowers (around 0.01%).
Most loans on Aave are issued in Ethereum, USDT, and USDC.
The Aave Cryptocurrency
The protocol has its own token—AAVE. At the time of writing, it ranks 30th by total crypto market capitalization. The coin trades at $280, which is 57% below its all-time high of $666 recorded on May 21, 2021.
Chart and information on the Aave cryptocurrency. Source: CoinMarketCap
AAVE is the Aave protocol’s governance token. It isn’t required to use the protocol itself; it serves governance, security, and ecosystem incentive functions.
Tracking the AAVE price is easiest on Quickex.
What Makes Aave V3 Better Than Competitors
The developers have focused on supporting as many cryptocurrencies as possible. Aave is also valued for the platform’s reliability, deep pools, and favorable terms. Judging by the fact that the platform tops the DeFi lending rankings and the nearest competitor still trails far behind, the team has met its objectives.
Why the Hype Around Aave in 2025
Several factors have helped Aave break into absolute leadership and shape the way today’s crypto-lending market looks:
- The platform continues to expand the list of supported assets.
- Over the years, it has built a large base of loyal users.
- Deep liquidity and multichain support make it easy to work with large sums.
- Strengthened security and DAO governance—plus bug bounties—boost trust in the brand.
Work by U.S. regulators toward a transparent regulatory framework has also had a positive effect on the project.
Conclusions
Aave is the undisputed leader among DeFi lending projects. On the platform, you can earn by supplying loans and also take out loans secured by your own cryptocurrency.
In 2025, Aave became the “gold standard” of the crypto-lending market. The project’s success and strong market position suggest it will continue to develop successfully.
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