What is Aave?

Aave is a Defi protocol offering depositors and borrowers a safe platform for decentralized crypto loans with high liquidity.

What is the Aave DeFi lending protocol?

Aave is an open-source and non-custodial liquidity protocol for earning interest on deposits and borrowing assets.

What does open-source in the above mean?

Aave is open source, meaning anyone can see, use, implement, or modify the original source code created by the Aave team.

Non-custodial?

Aave is a non-custodial protocol, which means the Aave platform itself never holds or otherwise possesses your cryptocurrency assets.

Methodology

• We analyzed daily Deposits and Withdraws number of transactions and volume since the beginning of the year from these tables: flipside_prod_db.aave.deposits , flipside_prod_db.aave.withdraws .
• Then we analyzed daily staking and unstaking on aave protocol with stkAAVE contract address from ethereum.core.ez_token_transfers table.

Daily Deposits since the beginning of the year

Daily Withdraws since the beginning of the year

In order to interact with Aave protocol, you simply deposit your preferred asset and amount. After depositing, you will earn passive income based on the market borrowing demand. Additionally, depositing assets allows you to borrow by using your deposited assets as a collateral.

aTokens holders receive continuous earnings that evolve with market conditions based on:

• The interest rate payment on loans - depositors share the interests paid by borrowers corresponding to the average borrow rate times the utilization rate. The higher the utilization of a reserve the higher the yield for depositors.

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• Flash Loan fees - depositors receive a share of the Flash Loan fees corresponding to .09% of the Flash Loan volume.

Each asset has its own market of supply and demand with its own APY (Annual Percentage Yield) which evolves with time. You can find the average annual rate over the past 30 days to evaluate the rate evolution, and you can also find more data on the reserve overview of each asset in the home section on the app.

Users can withdraw staking any time, after 2 days of cool down period. Other than the risks of smart contracts of Aave, using Aave have asset risk and liquidity risk as the two main risks of the protocol. Asset risk is the inherent risk of the cryptocurrency deposited and borrowed.

Here we see some Withdrawal Fees on CEXs from exchangefees.com

Conclusion

• We can Deposit our assets in Aave Protocol to borrow or lend or stake and etc and take interests from it
• Total Deposits is bigger than Total Withdraws over time
• Total Unstake Volume is bigger Than Total Stake Volume
• Aave Protocol had the highest deposit and withdraw number of transactions on June 13th since the beginning of the year
• Aave Protocol had the highest deposit volume on May 11th (almost 36.5M) since the beginning of the year
• Aave Protocol had the highest withdraw volume on March 30th (almost 18.5M) since the beginning of the year