Aave

Aave is a decentralized lending protocol that runs on public blockchains. It connects people who want to lend a crypto asset with people who want to borrow one, setting interest rates automatically from supply and demand rather than through a bank or a broker.

Suppliers deposit an asset into a shared liquidity pool and earn interest on it. Borrowers take a loan from that pool and post collateral worth more than they borrow, which protects suppliers if a loan is not repaid. The interest borrowers pay is what suppliers earn, and rates rise or fall algorithmically as a pool fills or empties.

Aave is non-custodial, meaning its open-source smart contracts hold the funds and no company can move them at will. Those contracts are public and have been independently audited. Like any on-chain protocol it still carries risk, including smart-contract risk and the market risk of variable rates.