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.

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Aave | Data breakdown

# Aave Net deposits Methodology

## 1. Overview

Net deposits is calculated as the total dollar value of user assets deposited within Aave's smart contracts. This metric is utilized by investors to assess capital commitment and overall protocol trust. The calculation is performed across multiple versions of the protocol, including Aave V2, Aave V3, and Aave V4, encompassing various markets such as Aave GHO (Ethereum), Aave Lido GHO (Ethereum), and other specialized pools. For Aave V2 and Aave V3, net deposits is determined by aggregating idle (available) liquidity and active borrow balances, whereas for Aave V4, supply-side deposits are tracked directly.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events from aToken contracts; `PostTotalShares` events from `Oracle` contracts and `TokenRebased` events from `stETH` contracts; `Supply`, `Withdraw`, `Borrow`, and `Repay` events from `SupplyLogic` and `BorrowLogic` contracts; `Mint` and `Burn` events from `VToken`, `AMMVToken`, and `SToken` contracts; `DiscountPercentUpdated` events from `GhoVToken` contracts; and `Add` and `Remove` events from Hub contracts (including `CoreHub`, `PlusHub`, `PrimeHub`, `GlobalDollarHub`, `CashHub`, and `EquitiesHub`), covering Ethereum, Arbitrum, Avalanche, Base, and 12 other chains
- **External data**: End-of-day price feeds for deposited assets, and asset metadata (including decimals and symbols)

## 3. Step-by-step calculation

### Component A: Idle liquidity tracking for Aave V2 and Aave V3 (EVM)
- **Purpose**: The calculation of available (idle) liquidity in EVM-based Aave V2 and Aave V3 markets.
- **Logic**: ERC-20 transfers to and from aToken contracts are tracked using `Transfer` events. Inflows (transfers to the aToken address) and outflows (transfers from the aToken address) are aggregated daily. For each asset, the cumulative sum of inflows minus outflows is calculated to determine the daily idle balance. For the specialized `stETH` market on Ethereum, rebases are accounted for by parsing `PostTotalShares` and `TokenRebased` events to scale and adjust the cumulative balance.
- **Key fields**: `block_timestamp` (timing), `value` (transfer amount), `token_address` (asset identification)

### Component B: Active borrow tracking for Aave V2 and Aave V3 (EVM)
- **Purpose**: The calculation of outstanding active loans for EVM-based Aave V2 and Aave V3 markets.
- **Logic**: Variable debt is tracked by parsing `Mint` and `Burn` events from `VToken` and `AMMVToken` contracts, where the raw amounts are scaled by the variable borrow index (normalized by decimal precision) to compute scaled debt. Stable debt is tracked by parsing `Mint` and `Burn` events from `SToken` contracts. For the GHO market on Ethereum V3, the outstanding debt is adjusted for the stkAAVE interest discount by parsing `DiscountPercentUpdated` events from `GhoVToken` contracts and subtracting the discounted interest from the scaled debt. The total active borrows are calculated by multiplying the cumulative scaled debt by the daily variable borrow index and adding the stable debt.
- **Key fields**: `block_timestamp` (timing), `value` (debt amount), `index` (borrow index)

### Component C: Aptos V3 liquidity and borrow tracking

- **Purpose**: The calculation of idle liquidity and active borrows for Aave V3 on Aptos.
- **Logic**: Supply-side inflows and outflows are tracked by parsing `Supply` and `Withdraw` events from `SupplyLogic` contracts, and the cumulative sum is calculated to determine idle liquidity. Active borrows are tracked by parsing `Borrow` and `Repay` events from `BorrowLogic` contracts, with the cumulative sum representing active loans. Short-form Aptos addresses are normalized to full Move type addresses using a centralized token mapping.
- **Key fields**: `block_timestamp` (timing), `amount` (operation amount), `reserve` (asset address)

### Component D: Aave V4 supply-side deposit tracking

- **Purpose**: The calculation of total deposits for Aave V4 markets.
- **Logic**: Supply-side deposits are tracked directly by parsing `Add` (inflows) and `Remove` (outflows) events from Hub contracts (such as `CoreHub`, `PlusHub`, and others). The cumulative sum of these inflows and outflows is calculated per spoke and spoke reserve to determine the total deposits. Active borrows are excluded from the Aave V4 TVL calculation because the idle balance already represents the full supply-side deposits.
- **Key fields**: `block_timestamp` (timing), `amount` (deposit/withdrawal amount), `spoke` (pool address)

### Component E: Total net deposits aggregation and USD conversion

- **Purpose**: The normalization, conversion to USD, and final aggregation of the net deposits metric.
- **Logic**: For Aave V2 and Aave V3, net deposits are calculated by summing the idle liquidity and active borrows. For Aave V4, net deposits are set equal to the direct supply-side deposits. All asset balances are normalized by their respective decimal precision and multiplied by end-of-day asset prices to convert the values to USD. The daily net deposits are aggregated across all chains and products.
- **Key fields**: `timestamp` (timing), `net_deposits` (aggregated metric value), `price_usd` (asset price)

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

Value of user assets deposited in the protocol.

AaveAAVE

Net deposits

Net deposits

Competitive landscape

Chain breakdown