Lending / Borrowing Protocol

Aave V3

Ethereum, Arbitrum, Optimism, Polygon, Avalanche Decentralized Lending Data as of March 2026

Aave is the largest decentralized lending protocol in DeFi with over $26 billion in TVL. Users deposit crypto assets to earn interest, and borrowers take loans against their collateral. The protocol operates algorithmically: interest rates adjust automatically based on supply and demand for each asset.

Fee per Transaction

0.09%

Flash loan origination fee

Round Trip Cost

$1.80

Buy + Sell on $1,000

TVL

~$26B

Largest lending protocol (DefiLlama)

How It Works

Depositors supply assets to lending pools and earn variable interest. Borrowers provide collateral (overcollateralized) and pay interest on their loans. If collateral value drops below the liquidation threshold, the position is partially liquidated to protect the pool.

Flash loans allow borrowing without collateral for a single transaction, paying a 0.09% origination fee. Regular borrowing has no origination fee; the cost is the variable borrow APR over the duration of the loan.

The protocol activated a fee switch in 2025, using revenue for AAVE token buybacks. The GHO stablecoin, minted through Aave, provides an additional revenue stream.

Strengths

+Largest TVL in DeFi lending. Over $26 billion deposited, providing deep liquidity across dozens of assets.

+Multi-asset, multi-chain. Supports lending and borrowing across ETH, stablecoins, and major altcoins on multiple chains.

+Flash loans. Unique feature enabling arbitrage, liquidation, and collateral swaps in a single atomic transaction.

+Proven governance. Active DAO with transparent parameter changes. Risk parameters are adjusted based on market conditions.

Risks

xLiquidation risk. If collateral value drops below the protocol threshold, positions are liquidated with a penalty. Volatile assets carry higher liquidation risk.

xSmart contract risk. Despite extensive auditing, the protocol interacts with multiple token contracts and oracles, each introducing potential attack surface.

!Variable rates. Borrow rates can spike during high utilization. A stable-rate option exists but has limited availability.

Open Aave ↗ Compare Fees ↗

Disclosure: This profile is provided for informational purposes only. White & TT does not hold a position in AAVE. Fee data reflects publicly documented parameters as of March 2026. Always verify current rates on the protocol. This is not financial advice.

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