Aave started as ETHLend in 2017, a peer-to-peer crypto lending platform founded by Stani Kulechov in Finland. After a 2018 rebrand to Aave (Finnish for “ghost”), it launched its pool-based lending protocol in January 2020. Within a year it was the largest DeFi lending protocol by TVL, surpassing the incumbent Compound. A decade later, it’s still the biggest money market in crypto.
Aave’s innovations defined how DeFi lending works. Flash loans — uncollateralized loans that must be repaid in the same transaction — were a novel primitive that launched an entire category of arbitrage and liquidation bots. aTokens, receipts that automatically accrued interest, became a standard DeFi pattern. Credit delegation, rate switching, and eventually isolated markets in Aave v3 all pushed the state of the art forward. Other protocols copied nearly every Aave feature.
By 2024 Aave had over $20 billion in deposits across Ethereum, Arbitrum, Optimism, Base, Polygon, Avalanche, and several other chains. It had launched GHO, its native stablecoin, and had a governance token (AAVE) that appreciated meaningfully during bull markets. Stani Kulechov had become one of DeFi’s most respected founders, balancing protocol leadership with broader ecosystem work including the Lens Protocol social network.
Aave’s durability is the lesson. While dozens of lending competitors — MakerDAO, Compound, Morpho, Spark, Euler, Kamino, Radiant — each had their moment, Aave kept shipping, kept adding chains, kept adding features, and kept its risk frameworks conservative enough to avoid the catastrophic exploits that took down other lending protocols. In a space where most protocols peak quickly and decline, Aave is one of the few that’s stayed at the top for multiple cycles, largely through boring, relentless execution.
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