AaveToken (AAVE) Tokenomics
AaveToken (AAVE) Information
Aave is a decentralized finance protocol that allows people to lend and borrow crypto.
AaveToken (AAVE) Tokenomics & Price Analysis
Explore key tokenomics and price data for AaveToken (AAVE), including market cap, supply details, FDV, and price history. Understand the token's current value and market position at a glance.
In-Depth Token Structure of AaveToken (AAVE)
Dive deeper into how AAVE tokens are issued, allocated, and unlocked. This section highlights key aspects of the token's economic structure: utility, incentives, and vesting.
Aave (AAVE) is a governance and utility token at the core of the Aave decentralized lending protocol. Its token economics are designed to incentivize participation, secure the protocol, and align stakeholder interests. Below is a comprehensive breakdown of its issuance, allocation, usage, incentives, locking, and unlocking mechanisms.
1. Issuance Mechanism
- Initial Token Launch: Aave originated as ETHLend with the LEND token, which was later migrated to AAVE at a 100:1 ratio (100 LEND = 1 AAVE) in September 2020.
- Maximum Supply: 16 million AAVE.
- Migration: 13 million AAVE (81.25% of supply) was claimable by LEND holders; 3 million AAVE (18.75%) was minted to the Aave Ecosystem Reserve during migration.
2. Allocation Mechanism
| Allocation Recipient | Description | Unlock Schedule / Mechanism | Amount Unlocked per Period |
|---|---|---|---|
| Public Sale | Fully unlocked at token genesis | Instant | 10,000,000 |
| Ecosystem Reserve | Minted during LEND→AAVE migration for incentives, grants, and staking | Instant (at migration) | 3,000,000 |
| Core Development | 20% unlocked at genesis, then 20% every six months | Bi-annual vesting | 180,000 |
| User Experience Development | 20% unlocked at genesis, then 20% every six months | Bi-annual vesting | 120,000 |
| Promotions & Marketing | 20% unlocked at genesis, then 20% every six months | Bi-annual vesting | 120,000 |
| Management & Legal | 20% unlocked at genesis, then 20% every six months | Bi-annual vesting | 120,000 |
| Unexpected Costs | 20% unlocked at genesis, then 20% every six months | Bi-annual vesting | 60,000 |
3. Usage and Incentive Mechanisms
- Governance: AAVE is the protocol’s governance token. Holders can propose and vote on protocol upgrades, parameter changes, and treasury allocations. Governance power can be delegated.
- Staking (Safety Module): Users can stake AAVE (or ABPT/GHO) in the Safety Module to backstop the protocol against shortfall events. Stakers receive AAVE rewards from the Ecosystem Reserve but risk slashing if the protocol suffers a loss.
- Incentives:
- Liquidity Mining: Previously, AAVE distributed stkAAVE as incentives for supplying/borrowing on Aave V2. This program ended in May 2022.
- Safety Module Rewards: As of April 2024, 820 AAVE are distributed daily to Safety Module stakers.
- Grants: The Aave Grants DAO, funded by the Ecosystem Reserve, issues grants to developers and contributors.
- Collateral: AAVE can be used as collateral to borrow assets on Aave V2/V3 across multiple chains.
- Fee Discounts: AAVE can be used to access discounts on borrowing the GHO stablecoin.
4. Locking Mechanism
- Staking Lock: When staking AAVE in the Safety Module, users must observe a cooldown period before unstaking. As of April 2024, the cooldown period is 20 days. After the cooldown, users have a 2-day window to withdraw; otherwise, a new cooldown must be initiated.
- Slashing: In the event of a protocol shortfall, up to 30% of staked AAVE can be slashed to cover losses.
5. Unlocking Time
- Vesting Schedules: For allocations (e.g., development, marketing), 20% was unlocked at genesis, with subsequent 20% tranches every six months, completing over two years.
- Ecosystem Reserve: Instantly unlocked at migration (September 24, 2020).
- Staking Unlock: Subject to the cooldown period as described above.
Example Unlock Events Table
| Unlock Date | Amount Unlocked | Vesting Start | Vesting End | % Unlocked | % of Circulating Supply |
|---|---|---|---|---|---|
| 2020-09-24 | 3,000,000 | 2017-12-10 | 2020-09-24 | 100% | 19.7% |
| 2019-12-10 | 600,000 | 2017-12-10 | 2020-09-24 | 81.25% | 3.94% |
| 2019-06-10 | 600,000 | 2017-12-10 | 2020-09-24 | 77.50% | 3.94% |
| 2018-12-10 | 600,000 | 2017-12-10 | 2020-09-24 | 73.75% | 3.94% |
| 2018-06-10 | 600,000 | 2017-12-10 | 2020-09-24 | 70.00% | 3.94% |
| 2017-12-10 | 10,600,000 | 2017-12-10 | 2020-09-24 | 66.25% | 69.61% |
6. Additional Notes
- No Buyback/Burn: As of April 2024, there are no token buyback or burn mechanisms.
- Governance Timelocks: Protocol changes are subject to timelocks (1 day for short, 7 days for long proposals) after governance approval.
- Ecosystem Reserve Control: Managed by on-chain governance, used for grants, incentives, and protocol development.
7. Summary Table
| Mechanism | Details |
|---|---|
| Issuance | LEND migration (100:1), max supply 16M, 3M to Ecosystem Reserve |
| Allocation | Public sale, Ecosystem Reserve, development, marketing, legal, unexpected costs |
| Usage | Governance, staking (Safety Module), collateral, fee discounts, grants |
| Incentives | Safety Module rewards, past liquidity mining, grants |
| Locking | 20-day cooldown for unstaking, slashing up to 30% in shortfall events |
| Unlocking | Bi-annual vesting for allocations, instant for reserve, cooldown for staking |
| Buyback/Burn | None as of latest data |
8. Implications and Analysis
Aave’s token economics are designed to:
- Align incentives for protocol security (via staking and slashing).
- Decentralize governance and treasury management.
- Reward active participation and development.
- Ensure a gradual and transparent release of tokens to avoid market shocks.
The structure has enabled Aave to become a benchmark for DeFi lending, with deep liquidity, robust governance, and a strong incentive system for both users and developers. The absence of buyback/burn mechanisms means value accrual is primarily through protocol usage, governance, and staking rewards rather than supply reduction.
In summary: Aave’s token economics are robust, with a clear issuance and allocation plan, strong incentive and governance mechanisms, and transparent vesting and unlocking schedules. This has contributed to its position as a leading DeFi protocol.
AaveToken (AAVE) Tokenomics: Key Metrics Explained and Use Cases
Understanding the tokenomics of AaveToken (AAVE) is essential for analyzing its long-term value, sustainability, and potential.
Key Metrics and How They Are Calculated:
Total Supply:
The maximum number of AAVE tokens that have been or will ever be created.
Circulating Supply:
The number of tokens currently available on the market and in public hands.
Max Supply:
The hard cap on how many AAVE tokens can exist in total.
FDV (Fully Diluted Valuation):
Calculated as current price × max supply, giving a projection of total market cap if all tokens are in circulation.
Inflation Rate:
Reflects how fast new tokens are introduced, affecting scarcity and long-term price movement.
Why Do These Metrics Matter for Traders?
High circulating supply = greater liquidity.
Limited max supply + low inflation = potential for long-term price appreciation.
Transparent token distribution = better trust in the project and lower risk of centralized control.
High FDV with low current market cap = possible overvaluation signals.
Now that you understand AAVE's tokenomics, explore AAVE token's live price!
How to Buy AAVE
Interested in adding AaveToken (AAVE) to your portfolio? MEXC supports various methods to buy AAVE, including credit cards, bank transfers, and peer-to-peer trading. Whether you're a beginner or pro, MEXC makes crypto buying easy and secure.
AaveToken (AAVE) Price History
Analyzing the price history of AAVE helps users understand past market movements, key support/resistance levels, and volatility patterns. Whether you are tracking all-time highs or identifying trends, historical data is a crucial part of price prediction and technical analysis.
AAVE Price Prediction
Want to know where AAVE might be heading? Our AAVE price prediction page combines market sentiment, historical trends, and technical indicators to provide a forward-looking view.
Why Should You Choose MEXC?
MEXC is one of the world's top crypto exchanges, trusted by millions of users globally. Whether you're a beginner or a pro, MEXC is your easiest way to crypto.
Disclaimer
Tokenomics data on this page is from third-party sources. MEXC does not guarantee its accuracy. Please conduct thorough research before investing.
Buy AaveToken (AAVE)
Amount
1 AAVE = 265.94 USD