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 Total value locked Methodology

## 1. Overview

Total value locked (TVL) is measured as the total value of on-chain deposits made into Aave's smart contracts. It is used as a leading indicator for revenue-generating activity, such as borrowing, trading, or staking, though the assets can typically be withdrawn by depositors at any time. TVL is calculated across Aave V2, Aave V3, and Aave V4 to represent the total liquidity available and utilized within the protocol.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events to and from `aToken` contracts; `Mint` and `Burn` events from `VToken` and `SToken` contracts; `DiscountPercentUpdated` events from `GhoVToken` contracts; `PostTotalShares` events from `Oracle` contracts and `TokenRebased` events from `stETH` contracts; `Supply`, `Withdraw`, `Borrow`, and `Repay` events from `SupplyLogic` and `BorrowLogic` contracts; and `Add`, `Remove`, `Draw`, `Restore`, `UpdateAsset`, and `AddSpoke` events from Hub contracts, alongside `AddReserve` events from `Spoke` contracts, which are captured across Ethereum, Arbitrum, Avalanche, Base, and 12 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Aave V2 and Aave V3 EVM idle liquidity tracking

- **Purpose**: The calculation of idle (available) deposits in Aave V2 and Aave V3 markets on EVM chains.
- **Logic**: ERC-20 token transfers are tracked to and from `aToken` contracts. Inflows (transfers to `aToken` addresses) and outflows (transfers from `aToken` addresses) are aggregated daily. Cumulative idle balances are calculated by summing net daily flows over time. For Lido `stETH` markets, balances are adjusted using rebasing indexes extracted from `PostTotalShares` events from `Oracle` contracts and `TokenRebased` events from `stETH` contracts to scale share balances to actual `stETH` balances.
- **Key fields**: `block_timestamp`, `value`, `token_address`, `to_address`, `from_address`

### Component B: Aave V2 and Aave V3 EVM active loans tracking

- **Purpose**: The calculation of outstanding variable and stable debt for Aave V2 and Aave V3 on EVM chains.
- **Logic**: Variable debt is tracked using `Mint` and `Burn` events from `VToken` contracts, where raw amounts are scaled by the variable borrow index to determine cumulative scaled debt, which is then multiplied by the current borrow index to obtain outstanding variable debt. For the Aave GHO (Ethereum) market, debt is adjusted for `stkAAVE` discounts by parsing `DiscountPercentUpdated` events from `GhoVToken` contracts and applying a discount correction to the scaled debt before it is multiplied by the borrow index. Stable debt is tracked using `Mint` and `Burn` events from `SToken` contracts, where the total supply is aggregated daily. Active loans are calculated as the sum of outstanding variable and stable debt.
- **Key fields**: `block_timestamp`, `amount`, `value`, `index_value`, `balance_increase`, `old_discount_percent`, `new_discount_percent`

### Component C: Aave V3 Aptos deposits and active loans tracking

- **Purpose**: The calculation of idle deposits and active loans for Aave V3 on Aptos.
- **Logic**: Idle deposits are calculated by aggregating `Supply` events (inflows) and subtracting `Withdraw` events (outflows) from `SupplyLogic` contracts, with cumulative balances floored at zero. Active loans are calculated by aggregating `Borrow` events (positive flows) and subtracting `Repay` events (negative flows) from `BorrowLogic` contracts, with cumulative active loans floored at zero.
- **Key fields**: `block_timestamp`, `amount`, `reserve_address`

### Component D: Aave V4 deposits and active loans tracking

- **Purpose**: The calculation of total deposits and active loans for Aave V4.
- **Logic**: Total deposits (which represent the full TVL for Aave V4) are calculated by aggregating supply-side inflows from `Add` events and subtracting outflows from `Remove` events emitted by Hub contracts, resolved per Spoke and reserve. Active loans are calculated by scaling `Draw` (borrow) and `Restore` (repay) events from Hub contracts to shares using the borrow index (`drawn_index`) captured from `UpdateAsset` events. Cumulative shares are calculated, and then multiplied by the latest borrow index to account for accrued interest.
- **Key fields**: `block_timestamp`, `amount`, `drawn_index`, `asset_id`, `spoke_address`

### Component E: USD conversion and final TVL aggregation

- **Purpose**: The normalization of all balances, conversion to USD, and final aggregation of total TVL.
- **Logic**: All asset balances are normalized by decimal precision. For Aave V2 and Aave V3, TVL is calculated per market as the sum of idle liquidity and active loans. For Aave V4, TVL is calculated directly from total supply-side deposits, as active loans are excluded from the TVL sum to prevent double-counting (since borrows draw from pooled Hub liquidity). Normalized asset balances are multiplied by end-of-day asset prices to convert values to USD. Daily values are forward-filled to account for days without event activity, and final values are aggregated by day, chain, and product.
- **Key fields**: `timestamp`, `tvl`, `price_usd`

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

Total value locked (TVL)

Total value locked (TVL) — value deposited into the project's applications.

AaveAAVE

Total value locked

Total value locked

Competitive landscape

Chain breakdown