Aave is an open-source, decentralized finance protocol that allows users to borrow cryptocurrencies or deposit them and earn passive income through interest. Aave’s operations rely on smart contracts that enable users to borrow from a “liquidity pool,” which is essentially made up of crypto that has been deposited into Aave by its users. In other words, Aave borrowers do not get loans from specific financial institutions or directly from individuals. Borrowers pay interest on their loan, while lenders receive interest on their deposits. Its native coin, AAVE Tokens, can be stored, transferred, and traded on several crypto exchanges.