Question 1

What is AAVE?

Accepted Answer

AAVE is the native governance token of the Aave Protocol and an ERC-20 token deployed on Ethereum. The Aave Protocol uses smart contracts to organize the supply and overcollateralized borrowing of crypto assets; AAVE does not represent a particular deposit and does not automatically generate deposit interest from any market. Its primary role is to enable holders to participate in protocol governance, and it may be used in supported contexts in the Safety Module or as collateral.

Question 2

What are AAVE's main uses?

Accepted Answer

AAVE's primary use is governance: holders can vote on protocol deployments, parameters, features, and other governance matters, or delegate their voting power to representatives. AAVE can also be staked in the Safety Module to provide backstop protection in certain insolvency cases; in markets that support AAVE, holders can also supply it as collateral. The outcomes of these three uses differ: voting affects governance decisions, staking carries risks and reward arrangements under Safety Module rules, and collateral affects a borrowing position.

Question 3

Who can participate in Aave governance?

Accepted Answer

Aave governance recognizes AAVE, stkAAVE, and aAAVE balances and their delegation relationships on Ethereum mainnet. Holders can vote themselves or delegate; after delegation, the delegatee represents that voting power in proposal votes. Voting may occur on a lower-fee voting network, but voting-power settlement and security remain on Ethereum mainnet, so operations on the voting network do not mean governance assets have been moved there.

Question 4

How does Aave governance verify voting power?

Accepted Answer

Participants can vote directly with eligible governance assets or delegate voting power to a representative address. For on-chain proposals, the system first determines balances and delegation relationships from the Ethereum block snapshot specified by the proposal; voters submit a storage proof of that balance on the voting network, and the contract uses it to verify voting eligibility and prevent double voting. Therefore, voting power depends on asset and delegation status at the snapshot, rather than balances temporarily changed after voting begins.

Question 5

What is the difference between AAVE and an aToken?

Accepted Answer

AAVE is a governance asset; an aToken is a position receipt received after a user supplies an asset to an Aave market. The former's balance does not itself indicate which asset the user supplied to a lending pool; the latter corresponds to a specific supplied asset and the user's position in that market. Therefore, holding AAVE does not mean holding an aToken or already providing liquidity to Aave.

Question 6

What does staking AAVE in the Safety Module mean?

Accepted Answer

Yes. AAVE can be staked in the Aave Safety Module as backstop protection for the protocol in the event of insolvency; in return, stakers may receive rewards. This staking is not the same as supplying AAVE to a lending market: the Safety Module provides capital support for system-risk events, whereas supplying assets to a market provides liquidity to borrowers. Before participating, users should separately understand the applicable module's exit, reward, and risk rules.

Question 7

Can AAVE be used as lending collateral?

Accepted Answer

In a specific Aave market that supports AAVE, users can supply AAVE and use it as collateral to open or maintain borrowing positions in other assets. Whether borrowing is available, how much can be borrowed, and liquidation risk are not determined by merely holding AAVE; they depend on that market's collateral parameters for AAVE, as well as the borrowed asset, prices, and position health. AAVE staked in the Safety Module and AAVE used as collateral in a market serve different purposes.

Question 8

How does an Aave governance proposal move from voting to on-chain execution?

Accepted Answer

The standard governance process generally begins with an ARFC governance proposal and a Snapshot vote, followed by on-chain voting to implement an upgrade; official documentation states that this complete standard process takes 13 days. During the on-chain stage, an executable payload is first registered and a proposal is created on the core network; after a cooldown, a snapshot is taken and voting opens. If success conditions such as thresholds and vote differential are met, the proposal enters the timelock queue, and any address can call execution after the timelock expires. Passing a vote does not mean the protocol changes immediately; timelock and execution steps remain conditions for it to take effect.

Question 9

Can AAVE be used on networks other than Ethereum?

Accepted Answer

AAVE was originally an Ethereum ERC-20 token, and the official documentation also lists cross-chain implementations on multiple networks. This availability depends on canonical messaging bridges and support on the destination network: whether bridging is available and where assets can enter or exit depend on the status of the relevant network bridge. Therefore, an AAVE deployment on a network does not mean every wallet, market, or bridge supports the same transfer path.

Question 10

Does holding AAVE mean providing liquidity to Aave?

Accepted Answer

No. Aave's lending liquidity comes from users supplying supported assets to markets, from which borrowers borrow assets; holding AAVE itself is only ownership of a governance asset. A supply position is created only when a user actually supplies AAVE or another supported asset to the relevant liquidity pool or market; if AAVE is staked in the Safety Module, it instead creates a safety backstop position rather than a lending-pool supply position.

Question 11

Is AAVE bought back by Aave burned?

Accepted Answer

Aave DAO's buyback program uses protocol revenue to purchase AAVE on the open market. The program was approved by governance in August 2024 as part of the Aavenomics update and began execution in April 2025; official information states an annual budget of $50 million, with weekly purchase amounts adjustable according to market conditions, liquidity, and price volatility. Purchased tokens are transferred to the DAO's Ecosystem Reserve for governance-approved uses such as staking rewards, grants, and service-provider payments; they are not directly burned.

Question 12

Where can I find AAVE's official rules?

Accepted Answer

When learning about or using AAVE, distinguish between governance assets, lending-market positions, and Safety Module positions: all may involve the same token, but their rights, risks, and operational paths differ. You can first consult the AAVE page to confirm token uses, then the governance documentation for voting, delegation, and execution processes; if planning to supply, use as collateral, or borrow, also rely on the supported assets and parameters of the specific market at that time.

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