Aave is a decentralized liquidity market protocol in which users can participate as depositors or borrowers. Depositors provide the market with liquidity to obtain passive income, while borrowers can borrow with over-collateral (perpetual) or low-collateralisation.
Like other loan protocols, Aave relies on two types of users: people who deposit cryptocurrencies in lending pools and borrowers who are interested in making a loan with an early collateral. The Aave protocol has been audited and secured. It is completely public, allowing anyone to interact with the UI client, API, or directly with smart contracts on the Ethereum network.
The AAVE token is used as the primary management measure for the Aave protocol. AAVE is used to vote and decide the outcome of Aave Improvement Proposals (AIP). In addition, AAVE can be stacked inside the Aave protocol to provide protocol security / insurance / depositors. Stakers earn rewards and pay protocol stacking fees.