Ave is a decentralized finance (DeFi) application created using Ethereum blockchain, with lenders and borrowers as the main participants. Lenders provide liquidity to the market (Lending Pools) to earn a passive income, while Borrowers can borrow from a Lending Pool.
Aave’s dashboard allows you to look at liquidity overall for the application across various versions and crypto currencies. The first section of the dashboard shows current liquidity, debt, and total value of the ecosystem. The second section allows you to view historical data.
If you wish to narrow down and analyze the liquidity of a given window, you can use the dropdown on the top right. The dashboard automatically updates over the selected window for the selected date range.
As you look at the bottom half of the dashboard, you can explore liquidity by currency. You can click on any currency to explore its liquidity in depth. Also, you can learn how dominant the currency was as compared to other currencies.
- Liquidity – In a DeFi (decentralized finance) application, liquidity refers to the amount of cryptocurrencies provided by participants to liquidity pools, for which they receive fees and tokens based on their share of the pool’s liquidity.
- Debt – In Aave, debt is the total amount borrowed by borrowers from the marketplace. Borrowers can borrow any crypto currency by pledging other crypto currencies as collateral.
- TVL – It measures the overall health and ranking of an application, and Aave is by far the most ranked Defi application. The total value locked is the amount of assets which are currently staked in the Aave Defi application.