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

Aave | Data breakdown

# Aave Token incentives Methodology

## 1. Overview

Token incentives measures the value of native assets paid out by Aave to its users and stakeholders. These distributions primarily include rewards for liquidity providers and participants in the Safety Module, where assets are staked to secure the protocol. The metric encompasses distributions across Aave V2, Aave V3, and GHO, reflecting the cost of acquiring and retaining liquidity and protocol security.

## 2. Data sources

- **Blockchain events**: `RewardsClaimed` events from `IncentivesController`, `stkAAVE`, `stkAAVEwstETHBPTv2`, `stkABPT`, and `stkGHO` contracts, and ERC-20 token transfers from the Aave Treasury, 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 incentives distributed to users who stake assets in the Safety Module to secure the protocol
- **Logic**: `RewardsClaimed` events are parsed from `stkAAVE`, `stkAAVEwstETHBPTv2`, `stkABPT`, and `stkGHO` contracts. The reward amounts are extracted from the event logs. Rewards originating from the `stkGHO` contract are attributed to GHO, while rewards from other Safety Module contracts are attributed to Aave V2.
- **Key fields**: `amount` (quantity of assets distributed), `block_timestamp` (timing)

### Component B: Incentives Controller reward extraction

- **Purpose**: Captures rewards paid to liquidity providers for participating in Aave V2 markets
- **Logic**: `RewardsClaimed` events are extracted from `IncentivesController` contracts. These events represent the claimable rewards earned by users through their interaction with lending pools. All extracted values from these specific contracts are attributed to Aave V2.
- **Key fields**: `amount` (quantity of assets distributed), `block_timestamp` (timing)

### Component C: Treasury distribution tracking

- **Purpose**: Captures manual or automated incentive distributions for Aave V3 and GHO from the protocol treasury
- **Logic**: ERC-20 token transfers are monitored from the Aave Treasury address. Transfers directed toward the Angle distributor or Angle management addresses are identified. If the transferred asset matches the GHO address, the value is attributed to GHO; otherwise, the distribution is attributed to Aave V3.
- **Key fields**: `value` (quantity of assets transferred), `token_address` (asset identification)

### Component D: USD conversion and aggregation

- **Purpose**: Normalizes all captured incentive values into a standard currency for reporting
- **Logic**: Raw asset amounts are normalized by decimal precision using asset metadata. These normalized amounts are multiplied by end-of-day price feeds to calculate the USD value. The data is then aggregated by day, chain, and product using UTC day boundaries.
- **Key fields**: `token_incentives` (USD-denominated value)

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

Value of native tokens distributed as incentives.

AaveAAVE

Token incentives

Token incentives

Competitive landscape

Chain breakdown