We're all familiar with the concept of lending & borrowing 💰
But what if there was a way to do it without any middlemen? 👀

This is where @AaveAave comes into the picture 👻

So what is it, how does it work, and why is it important in DeFi? 🤔

Let's get into it 👇

What is @AaveAave? 🔍

Aave is a decentralized lending protocol that lets people lend, borrow and earn interest on crypto assets, without any middlemen.

So instead of relying on banks for these services, you rely on transparent, smart contracts that run on the blockchain.

Founded in 2017 by @StaniKulechov, Aave was originally called ETHLend.

They started as a peer-to-peer protocol that matched lenders to borrowers but later pivoted to a system where people borrow from liquidity pools and rebranded to Aave which is Finnish for ghost 👻

How does it work? 💡

For lenders:
Anyone can deposit their crypto assets into a liquidity pool and earn interest on it

For borrowers:
Anyone can borrow crypto assets from a liquidity pool and pay interest on it

The rates are calculated algorithmically based on liquidity.

To facilitate lending & borrowing, Aave issues two types of tokens:

1. aTokens - issued against deposited assets to lenders, they increase proportionally with interest generated by the AAVE pool

2. $AAVE tokens - this is Aave's DAO token that also incentivizes borrowers