What is Aave ?
Aave (/'ɑrve/, Finnish word "ghost") is an open-source, decentralized non-custodial money market protocol on Ethereum. Users can participate as depositors (provide liquidity to earn passive income) or as borrowers. Aave's algorithm is responsible for calculating the corresponding ”deposit APY“ and "borrow APR" based on the "total liquidity" and "total borrowed" amount of the platform for users at each end. A Chainlink oracle is used to guarantee the price fairness for the collaterals. Depositors receive the aToken linked to the deposit asset value 1:1 as proof of deposit. The lending interest (aToken balance) starts accumulated immediately upon deposit. Depositors can also lend 25%-100% of other assets on the platform, depending on the types of aToken. Borrowers pay the borrowing interest under a fixed rate or a variable rate and can choose to switch between these two rates in real-time based on the market trend to minimize the borrowing cost. A loan can be liquidated once it's under-collateralized. The liquidation bonus varies based on the collateral type. (e.g. 5% for ETH and 15% for WBTC. Aave supports flash loans that allow users to borrow from the reserves within a single transaction as long as the user returns more liquidity that has been taken. Currently, Aave supports LINK, DAI, ETH, USDC, BAT, USDT and other common ERC-20 tokens used in the DeFi ecosystem. AAVE (pre. LEND) is the governance token that controls the admin key of the protocol. Latest public audit report is provided by [Trail of Bits](https://github.com/aave/aave-protocol/blob/master/docs/ToB_aave_protocol_final_report.pdf) and [Open Zeppelin](https://blog.openzeppelin.com/aave-protocol-audit/). There's also a [Bug Bounty Program](https://aave.com/bug-bounty) for AAVE. You can stake AAVE in its "Safety Module" to help protect the protocol from short fall events caused by smart contract risk, liquidation risk and oracle failure risk, and AAVE stakers will earn an incentive accordingly.