Aave Protocol

Definition ∞ Aave Protocol is a decentralized finance system for cryptocurrency lending and borrowing. It enables users to deposit digital assets to earn interest or borrow assets against their collateral. The protocol operates on various blockchains, facilitating permissionless financial operations through smart contracts.
Context ∞ Discussions surrounding Aave Protocol often focus on its governance proposals, risk parameters for different assets, and its role in the broader DeFi ecosystem’s liquidity provision. Regulatory scrutiny of DeFi protocols also presents a significant factor influencing its operational landscape and future development.