AAVE token – Lending category

Project Overview

1. What is the primary goal or use case of the DeFi token?
Lending and borrowing

2. What problem does this token aim to solve within the DeFi ecosystem?
Removing intermediaries in loans

Utility and Value Proposition

3. What is the utility of the token within the ecosystem (e.g., governance, staking, fee payments)?
Governance, staking.

4. Does the token provide access to any exclusive features or services?
Yes (lending, borrowing)

5. How does the token generate value for its holders and users?
Voting rights, staking rewards.
Token appreciation (when the price goes up)

6. Is there any incentive for long-term holding (e.g., staking rewards or governance participation)?
Yes

Governance and Community

7. Is the token used for governance within the platform? If so, how does governance work (voting power, proposals)?
Yes AAVE is a governance token. 1 token = 1 vote

Proposal Lifecycle

Governance Forum
The proposal journey begins with an idea introduced on the Aave Governance Forum. This is the space for initial dialogue, where community members provide feedback and help shape the proposal. These early discussions refine the concept before it progresses.

Temp Check (Snapshot Voting)
Following the forum discussion, the proposal advances to the TEMP CHECK phase via the Aave Snapshot Space. This step serves as a non-binding poll to measure community interest. TEMP CHECK votes are indicative and do not require in-depth technical documentation, focusing instead on gauging support for further development.

ARFC (Aave Request for Final Comments)
If the TEMP CHECK indicates sufficient support, the proposal enters the ARFC stage. Here, the proposal undergoes a more detailed review. Community members and service providers provide structured input on its potential impact on the protocol. Feedback at this stage helps prepare the proposal for formalization. ARFC votes also take place on the Snapshot platform.

AIP (Aave Improvement Proposal)
In the AIP phase, the proposal is formalized and submitted onchain. It consists of two main components: metadata hosted on IPFS, and the executable payload. The submission is made through Aave’s governance contracts, typically on Ethereum Mainnet.

Voting
Once submitted, the AIP moves from a PENDING state to ACTIVE, opening the voting window. Voting is conducted onchain via Aave’s governance mechanism. To pass, the proposal must meet quorum and vote differential thresholds. Failure to meet these criteria results in rejection.

Execution
Approved proposals proceed to execution through Aave’s governance infrastructure. A timelock delay—either one day or seven days—is applied depending on the proposal type before implementation. For cross-chain proposals, execution is handled through Aave’s Delivery Infrastructure (a.DI).

8. How decentralized is the governance process? Who has control over the decision-making?
Medium decentralization. Because 1 token = 1 vote, the biggest holders have more voting power and more influence on decision making.

9. How active and engaged is the community around the token?
Very active. 630k subscirbers on twitter. Although token went from 400 USD in december 2024 to 150 USD now.

Engagement around the project :
Development Activity (at 04/04/25)
Weekly commits: 73
Monthly commits: 72
Weekly developers: 16
Monthly developers: 16

10. Is there a clear plan for decentralizing control over time, if not already?
At the base, Aave is built on Ethereum (and other EVM-compatible chains like Polygon, Avalanche, Arbitrum, etc.) through smart contracts. The project and the fact that its token is a gouvernance token shows that it is already decentralized.

Liquidity and Market Performance

11. How liquid is the token? Is it listed on major exchanges (both centralized and decentralized)?
Highly liquid, listed everywhere (Binance, Uniswap, Coinbase, Bybit, etc…)

12. What is the token’s trading volume and price history? Is it volatile?
High volume, volatile. ATH in january 2021 at around 670USD. Range between 70USD and 100USD between july 2022 and may 2024. The token is currently trading around 140USD.

13. Are there deep liquidity pools available for the token in decentralized exchanges (DEXs)?
Yes. $27.56 billion of liquidity currently supplied in Aave.

14. What is the market capitalization, and does it seem reasonable based on the token’s utility and growth potential?
Large cap (2.21 billion USD), reasonable based on token utility.

Regulatory and Compliance

15. Does the token comply with regulations in key markets (e.g., KYC/AML)?
Partially. Note that Aave Arc is a DeFi liquidity market designed to be compliant with AML regulations, with all participating institutions required to undergo Know Your Customer (KYC) verification.

Technology and Smart Contracts

16. What blockchain is the token built on (e.g., Ethereum, Binance Smart Chain, Solana)?
Ethereum (EVM – ethereum virtual machine)

17. Does the blockchain support scalability, security, and low fees?
Yes, with Layer 2s like Polygon

Lending – AAVE