Lenders deposit funds into Aave and receive interest payments from borrowers (supply-side fees).

Aave is a non-custodial lending protocol built on Ethereum and other adjacent blockchains. Aave was founded by Stani Kulechov and launched in 2017.

AAVE tokenholders own and govern the protocol. They currently take a cut of the total interest paid by borrowers (revenue). Aave’s investors include ParaFi Capital, Framework Ventures, Three Arrows Capital, etc.

governance

github

twitter

discord

etherscan

website

Lending

Aave

Aave | Data breakdown

# Aave Expenses Methodology

## 1. Overview

Expenses measures the total cost incurred by the Aave protocol to incentivize liquidity and maintain the protocol's security framework. These costs primarily consist of token incentives distributed to lenders and borrowers across various markets, as well as rewards paid to participants in the Safety Module. Expenses are denominated in the distributed assets and converted to USD to provide a standardized view of the protocol's operational spending.

## 2. Data sources

- **Blockchain events**: `RewardsClaimed` events from `stkAAVE`, `stkAAVEwstETHBPTv2`, `stkABPT`, `stkGHO`, and `IncentivesController` contracts, and ERC-20 token transfers from Aave treasury addresses, covering Ethereum
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Safety Module reward extraction

- **Purpose**: Captures rewards paid to users who stake assets in the Aave Safety Module to secure the protocol.
- **Logic**: `RewardsClaimed` events are parsed from the `stkAAVE`, `stkAAVEwstETHBPTv2`, `stkABPT`, and `stkGHO` contracts. Rewards originating from the `stkGHO` contract are attributed to GHO, while rewards from other staking contracts are attributed to Aave V2.
- **Key fields**: `amount` (reward quantity), `block_timestamp` (timing).

### Component B: Liquidity provider incentive tracking

- **Purpose**: Measures incentives distributed to users for participating in Aave V2 lending markets.
- **Logic**: `RewardsClaimed` events are extracted from `IncentivesController` contracts. These events represent the claim of accrued rewards by suppliers and borrowers within the Aave V2 ecosystem.
- **Key fields**: `amount` (incentive quantity), `block_timestamp` (timing).

### Component C: Treasury-funded distributions

- **Purpose**: Identifies additional protocol expenses funded directly from the Aave Treasury, such as rewards distributed via external management contracts.
- **Logic**: ERC-20 token transfers are filtered where the sender is the Aave Treasury and the recipient is either the Angle distributor or Angle management addresses. Transfers involving the GHO asset are categorized under GHO, while all other transfers are attributed to Aave V3.
- **Key fields**: `value` (transfer amount), `from_address` (treasury identification), `to_address` (recipient identification).

### Component D: USD conversion and aggregation

- **Purpose**: Normalizes all identified expense components into a single USD-denominated metric.
- **Logic**: All extracted incentive and reward amounts are normalized by decimal precision based on asset metadata. These values are multiplied by end-of-day price feeds for the respective assets. The resulting USD values are aggregated by day, chain, and product (Aave V2, Aave V3, or GHO). Daily values are generated using UTC day boundaries, and a zero-filling strategy is applied for days without recorded activity.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total project operating and incentive expenses.

AaveAAVE

Expenses

Expenses

Competitive landscape

Chain breakdown