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Aave Explained: Lending, GHO, V3, V4, and AAVE Token (2026)

TL;DR

  • Aave is the largest decentralized lending protocol in crypto, founded in 2017 as ETHLend by Stani Kulechov and rebranded to Aave in September 2018. By April 2026 it holds approximately $20-26 billion in net deposits across eleven chains and is governed by holders of the AAVE token (capped at 16 million).
  • Aave v4 launched on Ethereum mainnet on March 30, 2026. Its hub-and-spoke architecture routes liquidity from a single Liquidity Hub on Ethereum to chain-specific Spokes; Umbrella replaces the legacy Safety Module with stablecoin-denominated cover; native GHO integration and the Horizon RWA market ship in the same release.
  • The protocol's native GHO stablecoin (launched July 16, 2023) is minted directly by Aave borrowers against on-chain collateral; 100% of GHO interest accrues to the Aave DAO, making it the largest direct revenue stream the protocol has ever had. GHO is live on Ethereum, Arbitrum and Base by 2026.
  • Aave has never suffered a major successful exploit of its core lending contracts in eight years and peak TVL above $30 billion — a record matched only by Uniswap among the top-tier DeFi protocols. The April 2026 KelpDAO incident caused an $8.45 billion 48-hour TVL drawdown but no loss of user funds; risk parameters and Umbrella backstop performed as designed.

Table of contents

What is Aave? (definition)

Aave is the largest decentralized lending protocol in DeFi. It is a set of audited, open-source smart contracts on Ethereum and ten other EVM chains that lets any wallet deposit a supported token (ETH, USDC, USDT, WBTC, stETH, sUSDe and ~30 others) to earn variable interest, or post that deposit as collateral to borrow other tokens at floating rates. There is no application form, no credit score, no human counterparty, and no custodian — every loan is over-collateralized and continuously priced by smart contracts using oracle feeds from Chainlink and other providers.

Aave was originally launched in November 2017 as ETHLend by Stani Kulechov — a peer-to-peer matching engine where individual lenders and borrowers could quote bilateral terms. After ETHLend struggled to scale, Kulechov pivoted the protocol to a pooled-liquidity model in late 2018 and renamed it Aave (Finnish for "ghost"). The pooled-liquidity design — where every depositor of a given asset shares a common reserve and every borrower draws from the same pool — has become the dominant architecture in DeFi lending and is the model used today by Compound, Spark, Radiant and many others.

By April 2026 Aave holds approximately $20-26 billion in net deposits across eleven chains, has originated more than $200 billion in cumulative loan volume, and is governed by holders of the AAVE token through Aave Governance v3 and the Aave DAO. The latest version, Aave v4, launched on Ethereum mainnet on March 30, 2026 with a hub-and-spoke architecture, the new Umbrella safety module, native GHO integration and the Horizon RWA market.

Who founded Aave? Stani Kulechov and ETHLend

Stani Kulechov is a Finnish lawyer turned developer who founded ETHLend in 2017 while studying at Helsinki University of Law. The original ETHLend whitepaper described a peer-to-peer crypto lending desk where individual borrowers posted ERC-20 collateral and lenders quoted custom interest rates and terms. ETHLend ran an ICO in October 2017 under the ticker LEND, raising approximately $16.2 million at a roughly $0.016 token price.

ETHLend struggled — peer-to-peer lending requires order-book-style matching, which is bandwidth- and gas-intensive on Ethereum 1.0. In September 2018 Kulechov rebranded the project to Aave (Finnish for "ghost") and refocused on pooled-liquidity lending, anticipating both Compound's pooled model (which shipped that same month) and the broader DeFi Summer to come. Aave Protocol v1 launched on Ethereum mainnet in early 2020. The LEND-to-AAVE token swap completed in October 2020 at a redenomination ratio of 100 LEND to 1 AAVE, with a hard supply cap of 16 million AAVE.

Kulechov remains CEO of Aave Labs (the operating entity, formerly Aave Companies) and is one of DeFi's most recognised public figures — frequently cited in Bank for International Settlements DeFi research, IOSCO's 2023 final DeFi report and the FSB's 2023 financial-stability assessment. Other long-time team leads include Marc Boiron (CFO until 2024), Ernesto Boado, Emilio Frangella and Marc Zeller.

Aave timeline 2017-2026

How Aave works (technical mechanics)

Pooled liquidity

Every supply on Aave goes into a shared reserve for that asset. If you deposit USDC, your USDC sits in the same pool as every other USDC depositor's. The pool's interest rate is determined dynamically by utilisation — the fraction of the pool that has been borrowed.

Interest-rate curves

Aave uses a piecewise-linear utilisation curve per asset. Below a target utilisation (typically 80-90%), the borrow rate rises slowly. Above the target, the rate rises exponentially to discourage further borrowing and incentivise repayment. Lender APY = borrow_APY * utilisation * (1 - reserveFactor). The reserveFactor (10-30% depending on asset) accrues to the Aave DAO treasury.

aTokens

When you deposit, Aave mints you an interest-bearing aToken at 1:1 — aWETH for ETH, aUSDC for USDC, aGHO for GHO and so on. aTokens rebase so that one aUSDC always redeems to slightly more than one USDC over time as interest accrues. aTokens are ERC-20 transferable and used as collateral throughout DeFi (in Pendle, Yearn, Morpho's MetaMorpho vaults).

Variable, stable and (deprecated) flash-loan rates

Borrowers historically chose between a variable rate (changes with utilisation) or a stable rate (fixed at borrow time, but the protocol can rebalance). Aave deprecated stable-rate borrowing in v3.1 (2024) due to underutilisation — every borrower now uses variable rates. Flash loans remain — uncollateralized loans that must be borrowed and repaid in the same transaction, charging a 0.05% fee.

Liquidations

If a borrower's health factor drops below 1.0 (the value of collateral × LTV ratio < value of debt), any external liquidator can repay up to 50% of the bad position and seize the borrower's collateral at a 5-15% liquidation bonus. Liquidations are the protocol's primary defense against bad debt; they run thousands of times per day and form a significant share of MEV opportunity on Ethereum and L2s.

Oracles

Aave relies primarily on Chainlink price feeds, with Pyth and a fallback aggregator on some chains. Oracle delay and accuracy are the single largest source of risk for any lending protocol; Aave's risk admins continuously tune oracle parameters.

Aave V1 (Sep 2018)

V1 was Aave's first pooled-liquidity release on Ethereum mainnet. It introduced the canonical aToken model, the variable-rate utilisation curve, the liquidation-bonus mechanic, and — most importantly — flash loans, the first uncollateralized borrow primitive on a public blockchain. Flash loans single-handedly enabled an entire generation of MEV strategies (arbitrage, liquidation cascades, debt-refinance) and remain Aave's most-imitated invention.

Aave V2 (Dec 2020)

Aave v2 launched December 3, 2020 with three major upgrades:

  1. Stable-rate borrowing — A predictable APY locked at borrow time, designed to imitate traditional fixed-rate loans (deprecated in v3.1, 2024).
  2. Native credit delegation — Allow another address to draw on your supplied credit line without depositing.
  3. Gas optimisations — Cut transaction costs by ~40-50% versus v1, critical during the 2020-2021 gas spike.

V2 ran on Ethereum mainnet, Polygon and Avalanche through 2024 and was eventually deprecated in favour of v3 once liquidity migrated. It still holds tail-end positions for assets that v3 risk admins chose not to relist.

Aave V3 (Mar 2022): E-Mode, Isolation, Portal

Aave v3 launched March 16, 2022 and introduced the four features that defined modern DeFi lending:

E-Mode (Efficiency Mode)

Allows correlated assets to be borrowed against each other at very high LTV — typically 93% for stablecoin-stablecoin pairs and 90% for ETH-stETH or ETH-cbETH pairs. E-Mode unlocked the liquid staking leverage trade (deposit stETH, borrow ETH at 90% LTV, swap to stETH, redeposit, repeat) which became one of DeFi's largest single capital flows.

Isolation Mode

When a new, less-trusted asset is listed, it can be confined to a per-asset debt ceiling (e.g. $20M) and used only against specific borrowable stablecoins. This caps protocol-wide blast radius from any single bad listing — a direct lesson from Compound's CREAM-style collapses elsewhere.

Portal

Native cross-chain liquidity. A whitelisted bridge can mint aTokens on a destination chain against locked collateral on the origin chain, letting Aave run as a single logical reserve across multiple deployments. Portal is one of the foundations Aave v4's hub-and-spoke architecture extends.

Risk Admins

A delegated council with the authority to update risk parameters (LTV, liquidation thresholds, debt ceilings) without a full governance vote. The role was effectively created and held by Marc Zeller of the Aave Chan Initiative until late 2024 when Aave Labs and Chaos Labs absorbed most risk-admin duties.

V3 deployed on eleven chains by 2025 — the broadest footprint of any DeFi protocol after Uniswap.

Aave V4 (Mar 2026): hub-and-spoke

Aave v4 launched on Ethereum mainnet on March 30, 2026. Its core design innovation is hub-and-spoke:

This solves the fragmentation problem that plagued v3: in v3, eleven separate deployments each maintained their own reserves and their own utilisation curves. A user borrowing USDC on Arbitrum couldn't access Ethereum mainnet's deeper USDC liquidity. v4 unifies this — every Spoke effectively borrows from the Hub through whitelisted bridge primitives derived from Portal.

Other v4 features:

V4 codebase is in the aave-dao/aave-v3-origin and aave/aave-v4 repositories; audited by Trail of Bits, OpenZeppelin, Certora and SigmaPrime.

The AAVE token, governance and safety

Tokenomics

AAVE is capped at 16,000,000 total supply:

There is no perpetual inflation — the supply is fixed. Roughly 99% has circulated since 2020. AAVE trades on every major exchange and has a market cap of approximately $4-5 billion in early 2026.

Governance v3

Aave Governance v3 launched in 2023 with a multi-chain voting architecture: AAVE holders vote on Polygon (cheap gas), and approved proposals execute on the target chain. To submit a proposal, a delegate needs 80,000 AAVE in voting power. Quorum is 320,000 AAVE — small enough that active delegates can pass critical proposals without long delays, large enough to require coalition-building.

Treasury

The Aave DAO treasury holds approximately $200-400M in stablecoins, AAVE and yield-bearing positions plus an additional $1B+ Ecosystem Reserve and accumulated GHO interest. It funds Aave Labs, Aave Chan, Chaos Labs (risk modelling), Trail of Bits / OpenZeppelin (audits), grants and bug bounties.

The Safety Module and Umbrella

The Safety Module is the foundation of Aave's risk underwriting. AAVE holders stake AAVE (and historically a Balancer 80/20 AAVE/ETH BPT) into the module. In a shortfall event — bad debt that exceeds reserve buffers — the protocol can slash up to 30% of staked AAVE and sell it to cover the gap. Stakers earn protocol revenue and emissions in exchange for accepting this risk; effective APY is typically 5-12%.

Umbrella, which launched in mid-2025 (Umbrella launch event), is the next-generation safety module. The redesign solves a long-standing problem: AAVE-denominated underwriting is procyclical. When a market crash creates the bad debt that Umbrella needs to cover, AAVE itself usually crashes alongside, reducing the dollar value of the cover at exactly the moment it is needed.

Umbrella replaces this with stablecoin-denominated cover:

By April 2026 the combined Safety Module + Umbrella holds approximately $1 billion in protective capital — the largest decentralized insurance fund in DeFi.

GHO: Aave's native stablecoin

GHO is Aave's over-collateralized USD stablecoin, soft-pegged to $1.00 and minted directly by Aave borrowers. It launched on Ethereum mainnet on July 16, 2023 (Aave governance proposal AIP-228). To mint GHO, a user opens a borrow position on Aave v3 (or v4) collateralized in ETH, stETH, USDC, USDT, WBTC, AAVE or other approved assets, and borrows GHO at a governance-set rate (currently 5-9% APY depending on chain and collateral mix).

What makes GHO unique among DeFi stablecoins:

  1. 100% of GHO interest accrues to the Aave DAO (vs ~10-30% reserve factor on regular Aave borrows). GHO is the protocol's largest direct revenue stream by 2026.
  2. AAVE stakers receive a discount on the GHO borrow rate (typically 30%), aligning the safety module with stablecoin demand.
  3. The GHO Stability Module (GSM) lets users swap USDC ↔ GHO 1:1 within a daily cap, providing a peg-defense mechanism analogous to MakerDAO's PSM.
  4. Multi-chain expansion — GHO is live on Arbitrum (2024) and Base (2025) by 2026; cross-chain transfers use Chainlink CCIP and have a unified mint/redeem ledger.

GHO supply has grown from $0 at launch to roughly $300-500 million by April 2026, making it a top-15 stablecoin by market cap and the third-largest DeFi-native stable behind USDS (Sky) and FRAX.

Aave Network: the protocol's own Layer 2

The Aave Network is the protocol's planned own Layer 2 rollup, first proposed by Marc Zeller of the Aave Chan Initiative in mid-2024. Production planning has stretched into 2026; the chain is expected to launch on the OP Stack or zkSync stack in late 2026.

Design goals:

The Aave Network is the protocol's most ambitious infrastructure bet and a direct response to the multi-chain fragmentation of the v3 era.

Aave Chan Initiative and the delegate ecosystem

The Aave Chan Initiative (ACI) is the most influential delegate organisation in Aave governance. Founded by Marc Zeller — a former Aave Companies team member — in 2022, ACI quickly became the protocol's de facto risk admin, drafting the majority of v3 risk-parameter proposals, the Umbrella redesign, the Aave Network roadmap and the GHO multi-chain expansion.

ACI's role illustrates what mature DeFi governance actually looks like: a small group of full-time, financially-aligned analysts (Zeller, Chaos Labs, Llama Risk and a handful of others) write the proposals; AAVE holders ratify or veto them. Casual token-holder voting is rare — the eligible electorate is concentrated, the proposals are technical, and execution requires deep institutional context.

Other major Aave delegates: GFX Labs, Chaos Labs, Llama Risk, Stable Lab, Wintermute Governance, MerlinEgalite (now Avara) and university blockchain clubs. Together they form a council-like layer that the BIS, IOSCO and FSB DeFi reports have identified as the closest analogue to traditional banking risk committees.

Aave Arc and Horizon (institutional + RWA)

Aave Arc launched in July 2022 as a permissioned, KYC-gated version of Aave for institutional counterparties (banks, hedge funds, family offices). Whitelisted addresses borrow against whitelisted collateral; non-whitelisted addresses cannot interact. Arc was the canonical model for "institutional DeFi" cited in Oliver Wyman's 2022 institutional DeFi report and the 2023 follow-up on capital markets. Adoption was slow — only a few dozen institutions onboarded — but Arc remains the foundational template.

Aave Horizon is the v4-era successor: a permissioned RWA market that integrates tokenised real-world collateral — BlackRock's BUIDL fund, Mountain USDM, Ethena sUSDe, USDtb, tokenised treasuries from Ondo and Backed — as collateral for permissioned borrowers. Horizon went live alongside v4 in March 2026 and is the protocol's primary capture vector for the trillion-dollar tokenised-treasury market that will accelerate through 2026-2028.

Eleven chains: where Aave runs

Chain Aave version TVL share (Apr 2026) Notable
Ethereum v3 + v4 Hub ~55% Liquidity Hub for v4; deepest reserves
Arbitrum v3 + v4 Spoke ~12% Top-3 Arbitrum protocol by TVL
Base v3 + v4 Spoke ~7% Aerodrome's home; Aave still top-2 lender
Polygon PoS v3 + v4 Spoke ~5% Earliest L2-style deploy (2021)
Optimism v3 ~4% Velodrome's home
Avalanche v3 ~6% Major 2021 incentive campaign
BNB Chain v3 ~4% Smaller share than Venus locally
Metis v3 ~1% One of Aave's smallest deployments
Gnosis Chain v3 ~1% EUR-stablecoin focus
Scroll v3 ~2% Newer zk-rollup
ZKsync Era v3 ~3% First major zk-EVM deploy

Total cross-chain TVL: approximately $20-26 billion in April 2026.

Risk parameters explained

For each listed asset, Aave governance sets:

These parameters are continuously tuned by Aave Chan, Chaos Labs and the Risk Admins.

TVL, revenue and market data in 2026

Sources: DefiLlama Aave dashboard, Aave governance forum quarterly reports, Messari State of DeFi 2024, Aave Chan Initiative monthly snapshots.

Hack and exploit history

In eight years and peak TVL above $30 billion, Aave's core lending contracts have never been successfully exploited. The two notable incidents:

  1. November 22, 2022 — Avi Eisenberg cbETH attack on Aave v2. Eisenberg attempted a market-manipulation strategy on the cbETH market (similar to his Mango Markets exploit weeks earlier). The attack lost the protocol approximately $1.6 million. Aave Chan and Aave Labs froze the cbETH market within hours, the bad debt was absorbed by reserves, and full reimbursement was funded by the Safety Module / treasury. No external user lost funds.
  2. November 2020 — BTC oracle hiccup. A momentary BTC price feed deviation caused a small number of borrowers to be liquidated incorrectly. Aave reimbursed affected users from the treasury.

The protocol has weathered without loss the Terra UST collapse (May 2022), FTX implosion (November 2022), the Curve July 2023 reentrancy cascade, the Euler March 2023 hack (where Euler had $197M drained — Aave had no exposure), and the April 2026 KelpDAO incident (which caused an $8.45B 48-hour TVL drawdown via panic withdrawals but no actual loss of user funds; Aave's risk parameters, oracle redundancy and Umbrella backstop performed exactly as designed).

The track record is one of the strongest in DeFi, comparable to Uniswap's zero-exploit history.

Risks and criticism

  1. Smart-contract risk. Eight years and zero exploits is excellent but not zero — every audit caveat applies.
  2. Oracle risk. A misbehaving Chainlink feed could trigger liquidation cascades. Aave has redundant feeds and circuit breakers but the failure mode is not fully eliminable.
  3. Liquidation cascades. During fast crashes (March 2020, May 2022, March 2023), thousands of positions can liquidate within minutes; gas markets spike and liquidator failures can cause partial bad debt. The protocol weathers these but borrowers can lose more than expected.
  4. Stablecoin depeg risk. GHO is over-collateralized and structurally robust, but any USD-pegged asset can briefly trade off-peg in a panic.
  5. Bridge risk for v4 hub-and-spoke. Cross-chain liquidity routing depends on whitelisted bridges; the bridge attack surface is real.
  6. Centralisation residual. Aave Labs holds key admin multi-sigs (with timelocks); a small number of delegates effectively control governance outcomes.
  7. Regulation. IOSCO 2023 and FSB 2023 frame Aave-class lending as a systemic candidate. Aave Arc and Horizon are designed to give regulators a permissioned lane without breaking permissionless v3/v4.
  8. Competition. Morpho Blue, Spark (forked from Aave v3), Compound v3 and Euler v2 all eat at Aave's market share; the protocol's response is v4's hub-and-spoke unification.

How to lend and borrow on Aave (step-by-step)

Lending (supplying)

  1. Install a self-custodial wallet (MetaMask, Rabby, Uniswap Wallet, Safe).
  2. Fund with the asset you want to lend (ETH, USDC, USDT etc.) on a supported chain.
  3. Visit app.aave.com. Always verify the URL — phishing clones are common.
  4. Connect wallet. Select chain (Ethereum mainnet, Arbitrum, Base etc.).
  5. Click "Supply" on your chosen asset. Approve the transaction (one-time per token), then confirm the supply.
  6. You receive aTokens at 1:1 (e.g. aUSDC). Interest accrues per second.
  7. Withdraw at any time (subject to pool utilisation — at very high utilisation withdrawals queue until borrowers repay).

Borrowing

  1. Supply collateral (step above). Each asset has an LTV ratio (e.g. ETH 80%, USDC 87%).
  2. On the borrow tab, select the asset to borrow. The UI shows your max borrow given the LTV.
  3. Borrow at most 70-75% of the LTV to leave room for collateral price swings — going to the maximum risks immediate liquidation.
  4. Confirm the borrow transaction. Funds appear in your wallet.
  5. Monitor your health factor in the dashboard. Below 1.0 = liquidatable. Above 1.5 = comfortable. Below 1.2 = risky.
  6. Repay any time by calling "Repay." Interest accrues per second; you can repay partial or full.

Staking AAVE in Safety Module / Umbrella

  1. Acquire AAVE (or USDC for Umbrella).
  2. Visit app.aave.com/staking.
  3. Stake AAVE into the Safety Module or USDC into Umbrella.
  4. Earn rewards in AAVE / GHO / protocol revenue.
  5. Cooldown: 10-day unstake window before withdrawing (slashing risk applies during this).

Aave vs Compound, Spark, Morpho, Euler

Protocol Founder / launch Architecture TVL (Apr 2026) Token Edge
Aave Stani Kulechov, 2018 Pooled liquidity, hub-and-spoke (v4) $20-26B AAVE Most assets, most chains, GHO, Umbrella
Compound Robert Leshner, 2018 Original pooled lender ~$2B COMP Battle-tested; single-borrow-asset Comet markets in v3
Compound v3 (Comet) Compound Labs, 2022 Per-market single-borrow-asset ~$2B COMP Simpler risk model, no rehypothecation
Spark Phoenix Labs (Sky/MakerDAO), 2023 Aave v3 fork + USDS DDM ~$5-6B (Sky-governed) Deepest USDS liquidity, Direct Deposit Module
Morpho Blue Paul Frambot, 2023 Modular isolated markets, immutable ~$4B MORPHO Permissionless market creation, isolated risk, MetaMorpho vaults
Euler v2 Michael Bentley, relaunched 2024 Modular isolated markets ~$500M EUL EVK toolkit, custom rate models, hooks
Sky Lending Sky DAO, 2024 Aave fork on Sky stack ~$3B SKY/SPK Native USDS issuance
Radiant 2022 Aave v2 fork on Arbitrum <$200M (post-2024 exploit) RDNT Cross-chain via LayerZero

Aave dominates by total deposits and breadth of asset support. Morpho leads on isolated, customisable markets. Spark dominates DAI/USDS routing within the Sky ecosystem. Compound v3 is the simplest risk model. Euler v2 is the most flexible builder kit.

Research and reports

FAQ

What is Aave?

Aave is the largest decentralized lending protocol in DeFi. It lets anyone deposit a supported token (ETH, USDC, USDT, WBTC and dozens more) to earn variable interest, or post that deposit as collateral to borrow other tokens at floating rates. Aave was founded in 2017 as ETHLend by Stani Kulechov in Switzerland and rebranded to Aave (Finnish for "ghost") in September 2018. By April 2026 it holds approximately $20-26 billion across eleven chains.

Who founded Aave?

Stani Kulechov, a Finnish lawyer turned developer, founded ETHLend in 2017 after raising $16.2M in an October 2017 ICO under the LEND ticker. ETHLend rebranded to Aave in September 2018 to pivot from peer-to-peer matching to pooled liquidity. The LEND-to-AAVE token swap completed in October 2020 at 100:1 with a 16M hard supply cap. Kulechov remains CEO of Aave Labs.

What is the difference between Aave V2, V3 and V4?

V2 (December 2020) added stable-rate borrowing, native credit delegation and gas optimisations. V3 (March 2022) introduced E-Mode (correlated 93% LTV), Isolation Mode, Portal cross-chain, and Risk Admins. V4 (March 2026) restructures Aave as a hub-and-spoke architecture — a single Liquidity Hub on Ethereum supplies liquidity to chain-specific Spokes — with native GHO integration, the Umbrella safety module, and the Horizon RWA market.

What is the AAVE token?

AAVE is the protocol's governance and safety token, capped at 16 million total supply. Holders vote on every protocol parameter through Aave Governance v3. AAVE holders can also stake into the Safety Module or Umbrella to backstop bad debt; in exchange they receive a share of protocol revenue, with up to 30% slashing risk in shortfall events. Market cap ~$4-5B in early 2026.

What is GHO?

GHO is Aave's native over-collateralized stablecoin, soft-pegged to $1 and minted directly by Aave borrowers, launched July 16, 2023. To mint, a user opens a borrow position collateralized in ETH, USDC, WBTC, AAVE etc. and borrows GHO at a 5-9% rate. 100% of GHO interest accrues to the Aave DAO treasury — the protocol's largest direct revenue stream. GHO is now live on Arbitrum and Base.

What is the Aave Safety Module and Umbrella?

The Safety Module is Aave's mutualised insurance fund. AAVE holders stake AAVE into the module; in shortfall events, up to 30% of staked AAVE can be slashed. Umbrella, which launched in mid-2025, lets stakers post stablecoin (USDC, USDT) cover instead of AAVE-denominated cover, providing dollar-stable underwriting. Combined, ~$1B in protective capital by April 2026.

What chains is Aave on?

Aave v3 is deployed on eleven chains: Ethereum mainnet, Arbitrum, Optimism, Polygon PoS, Avalanche, Base, BNB Chain, Metis, Gnosis, Scroll and ZKsync Era. Aave v4 hub-and-spoke launched on Ethereum (Hub) plus Arbitrum, Base and Polygon Spokes in March 2026; additional Spokes scheduled through 2026. Aave Network — the protocol's own L2 — is in production planning for late 2026.

Has Aave ever been hacked?

Aave has never suffered a major successful exploit of its core lending contracts in eight years and peak TVL above $30 billion. Two minor incidents: the November 2022 Avi Eisenberg cbETH attack ($1.6M, contained, fully reimbursed) and the November 2020 BTC oracle hiccup (reimbursed). The April 2026 KelpDAO incident triggered an $8.45B 48-hour TVL drawdown but no user-fund loss.

How do I borrow on Aave?

Connect a self-custodial wallet to app.aave.com on a supported chain, supply collateral by depositing a supported token (you receive aTokens), then borrow against it up to the asset's LTV ratio. Stay at 70-75% of the max LTV to avoid liquidation if collateral drops. Repay any time; interest accrues per second.

Aave vs Compound vs Spark vs Morpho?

Aave is the broadest pooled lender — most assets, most chains, deepest stablecoin liquidity, native GHO. Compound v3 simplifies into per-market single-borrow-asset architecture. Spark is Sky/MakerDAO's Aave v3 fork with deep USDS liquidity. Morpho Blue ships isolated, immutable, oracle-agnostic markets. Aave dominates by deposits; Morpho leads on isolated markets; Spark dominates DAI/USDS routing.

Glossary

Related reading (internal links)

Sources and further reading

About the author

GG Cypher Research is the in-house research arm of GG Cypher, a quantitative crypto desk operating arbitrage, MEV and yield strategies on Ethereum, Solana and Base. Our analysts run live capital across Aave v3 and v4 markets, monitor liquidator-bot performance daily, and have first-hand operational experience with E-Mode looping, GHO arbitrage and Umbrella underwriting. Editorial standards: every numeric claim sourced; protocol risks declared honestly; no affiliate links. Read more at /about.

Last updated: 2026-04-26

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