What Is Aave? Aave Labs, the Lending Protocol, GHO and the Aave App

Aave Labs, the Aave Protocol and the Aave DAO are different things

The protocol is software; Aave Labs is a company; the DAO is the governance layer. Readers searching "what is Aave protocol" usually mean the smart contracts, which run on Ethereum and other networks and can be used through any compatible interface. Aave Labs builds interfaces and tooling on top of them, and its website disclaimer says it "does not control or operate any version of the Aave Protocol." Parameter changes such as which assets can be borrowed, collateral limits and fee splits go through Aave DAO governance votes rather than a company decision. (Aave docs, Aave legal hub)

History. The project began in 2017 as ETHLend, a peer-to-peer lending platform founded by Stani Kulechov, and relaunched in January 2020 as Aave with a pooled-liquidity model. "Aave" is the Finnish word for "ghost," which answers the common "what does Aave stand for" query: it is a name, not an acronym. (Wikipedia, Aave)

Avara and the 2026 refocus. For a period the company grouped its projects under an umbrella brand called Avara. In February 2026 Aave Labs retired that brand, said the Family wallet would be wound down, and moved all products, including the mobile app, Aave Pro and Aave Kit, under the Aave Labs name. It had sold the Lens social protocol to Mask Network in January 2026. (The Block, February 3, 2026)

Labs–DAO tension. The same report describes a dispute between Aave Labs and parts of the Aave DAO over which entity controls the protocol's direction, sharpened after Aave Labs redirected interface swap fees that had previously funded the DAO treasury. A community proposal to take over Aave Labs' intellectual property failed. Kulechov has proposed sharing future non-protocol revenue with AAVE holders. This governance context is still developing as of October 2026.

Legal entity. Aave Labs' public Terms of Service (updated September 7, 2026) name the contracting party only as "Aave Labs," select Cayman Islands law and set the Cayman Islands as the arbitration seat. No registered address is published on the legal hub. (Aave Terms of Service)

What Aave offers in 2026

Aave Protocol V3 and V4

Two protocol generations are live. V3 remains the version most third-party integrations reference, with markets on several EVM networks and a deployment on Aptos. V4 launched on Ethereum mainnet on March 30, 2026, after more than two years of development, in what was described as a controlled rollout. (Aave V3 docs, The Block, March 30, 2026)

V4 replaces isolated per-network pools with a hub-and-spoke design:

• Hubs hold concentrated liquidity. Three launched first: Prime (lower risk), Core and Plus (higher risk-return).
• Spokes are markets that draw a governance-capped credit line from a hub and can set their own risk parameters. Lido, ether.fi, Kelp, Ethena and Lombard were named as initial spoke operators.
• Creating new spokes is not permissionless at launch; the DAO approves them.

Aave Labs founder Stani Kulechov has argued in a governance proposal for eventually deprecating V3, and the DAO has discussed reducing V3 deployments on low-activity chains. Users with V3 positions should watch governance announcements rather than assume V3 markets will stay open indefinitely.

GHO stablecoin

GHO is an over-collateralized, dollar-pegged ERC-20 stablecoin native to the protocol. Users mint it by borrowing it from the V3 Ethereum market against posted collateral; it is not backed by a bank reserve. Governance-approved "facilitators" can mint and burn GHO within set caps, and GHO Stability Module contracts let users convert between GHO and approved stablecoins at a fixed ratio for a fee. GHO is deployed on Ethereum and eight other networks, including Arbitrum, Base and Avalanche, and moves between them through Chainlink CCIP. (Aave docs, GHO)

Aave App

The Aave App is a consumer savings app that routes stablecoin deposits into on-chain lending markets. As of October 2026 the app page shows:

• a variable Base Rate of 6.00% per year, with eligible boosts up to 6.25%; balances above $100,000 earn a lower rate;
• supported assets USDT, USDC and GHO-related tokens, with stablecoin deposits and withdrawals on Arbitrum;
• early access on iOS, with Android and web on a waitlist;
• "withdraw anytime with no fees" from the app side;
• a Balance Protection program for eligible customers that the company states "is not insurance" and covers only certain loss events.

The rates are not guaranteed, and the page itself warns that capital is at risk. Country availability is not listed on the product page. (Aave App)

Aave Pro and Aave Kit

Aave Pro, launched alongside V4, is a web interface for advanced users at app.aave.com. Aave Kit is developer tooling for integrating Aave markets into other apps. Both have their own terms in the legal hub.

How lending and borrowing work on Aave

The protocol pools deposits from many suppliers and lends them to over-collateralized borrowers; interest rates adjust automatically with how much of each pool is borrowed.

1. Supply. A user connects a self-custody wallet and deposits an asset into a market. The deposit begins earning the market's variable supply rate.
2. Enable collateral. Supplied assets that are eligible can be marked as collateral. Only collateral-enabled positions can be seized in a liquidation.
3. Borrow. The user borrows a different asset up to the collateral's loan-to-value (LTV) limit, the maximum percentage of its value that can be borrowed. Borrowers pay a variable rate.
4. Monitor the health factor. The health factor compares risk-adjusted collateral value with debt. If it falls below 1.0, the position can be liquidated.
5. Repay and withdraw. Repaying debt raises the health factor; withdrawing supplied assets requires that enough unborrowed liquidity remains in the pool.

Liquidations in V4 work as a Dutch auction: the lower a position's health factor, the larger the bonus a liquidator receives from the seized collateral. If a liquidation would leave less than $1,000 of debt in a reserve, the whole debt in that reserve must be liquidated. (Aave V4 liquidations)

Flash loans let developers borrow and repay within one transaction without collateral. The premium was initialized at 0.05% of the borrowed amount and can be changed by governance; the live value is readable on-chain. (Aave flash loans guide)

For background on pooled lending and smart-contract custody, see OBOL's guides on what DeFi is and custodial vs. non-custodial services.

What using Aave costs

Aave has no account or subscription fee; costs come from the protocol and the underlying blockchain.

The largest practical cost for borrowers is usually not a fee but a liquidation: a sharp drop in collateral price can cost a liquidation bonus on top of losing the position.

Who can use Aave

Anyone with a compatible self-custody wallet can call the protocol contracts directly; there is no account sign-up or identity check at the protocol level. Aave Labs' own interfaces are a different matter. The Terms of Service (updated September 7, 2026) bar use from Belarus, Côte d'Ivoire, Crimea, Cuba, the so-called Donetsk and Luhansk People's Republics, Iran, Iraq, the Kherson and Zaporizhzhia regions of Ukraine, Liberia, Libya, Myanmar, North Korea, Russia, Sudan, Syria and Venezuela, as well as sanctioned persons. The list can change. The Aave App adds its own onboarding and device requirements.

Security, custody and risk

Aave is non-custodial: Aave Labs does not hold user funds in the protocol, and no one at the company can reverse a transaction or recover a lost wallet. That shifts risk to the user and to the code.

• Smart-contract risk. Bugs in the contracts could cause losses that no company can reverse. Aave Labs runs a public bug bounty through Sherlock; any audit covers a specific code version and is not a guarantee. V4 is newer code than V3.
• Liquidation risk. Borrowers can lose part of their collateral quickly in volatile markets. Keeping a health factor well above 1.0 reduces, but does not remove, that risk.
• Oracle and collateral risk. Positions are valued by price oracles; a mispriced or depegging collateral asset can trigger liquidations.
• Liquidity risk. Suppliers can be temporarily unable to withdraw if a pool is fully borrowed.
• GHO peg risk. GHO relies on over-collateralization and market arbitrage; governance can adjust its borrow rate when the price leaves a band around $1.
• Governance risk. Parameters, supported assets and even which version is maintained are decided by token-holder votes, and the Labs–DAO relationship has been contested in 2026.
• App-level controls. The Aave App adds Face ID, 2FA, trusted devices, a withdrawal allowlist and opt-in biometric recovery, and the company states its code was reviewed by nine security firms and that it holds SOC 2 certification. These are company statements.

Never share a seed phrase with anyone claiming to be Aave support; see OBOL's seed phrase security guide.

The AAVE token and governance

AAVE is the governance token used to vote on Aave DAO proposals, from risk parameters to treasury spending and version upgrades. Holding AAVE is not equity in Aave Labs, and protocol revenue accrues to the DAO treasury under governance rules rather than to the company. Debates over how much interface and product revenue should reach token holders were active in 2026. Governance discussions take place on the public forum at governance.aave.com.

OBOL evaluates the lending markets and the protocol in separate pieces: OBOL's Aave lending review and OBOL's Aave Protocol review. Other lending venues are compared on the lending ratings hub.

Support and verifying contacts

Aave Labs runs a help and support center at aave.com/help for its interfaces and the Aave App. Because the protocol is non-custodial, support cannot move funds or reverse transactions. The company publishes a verification tool at aave.com/verify where anyone can check whether a social account, URL or username belongs to Aave Labs; the company says it will never ask for a seed phrase, private key or wallet access. Security reports go through aave.com/security and the Sherlock bug bounty.

Official channels

Use only these links, confirmed on aave.com and aave.com/verify on October 19, 2026:

• Website: aave.com
• X: x.com/aave
• GitHub: github.com/aave
• Discord: discord.com/invite/aave
• LinkedIn: linkedin.com/company/aavelabs/
• Instagram: instagram.com/aave/
• Governance forum: governance.aave.com
• Contact verification: aave.com/verify