Sometimes the phrase "AAVE tokens" can be too loosy defined and hence inclusive of every token within the AAVE network when a literal reading of that same phrase convey a meaning more in reference to the tokens having the ticker/symbol AAVE which is the token of the AAVE network. So using the phrase "AAVE tokens" might suggest all the tokens falling within the AAVE network, thus reducing the possibility for the readers to grasp a correct understanding of the nature and function of the different tokens that participate in the AAVE protocol, hence leading to an imcomplete (at best) understanding of the AAVE network as a whole. Therefore we decided to add more specificity into some terms and defintions related to the phrase "AAVE tokens" that we will be using for this study. Below are some of the main terminology and definitions used in this study:
AAVE-based tokens: When using this terminology, we refer to tokens (such as ERC-20 tokens like WETH, WBTC, LINK, etc) that will or have already been deposited/withdrawn into or from an AAVE liquidity pool in order to be able to be used as a source of liquidity from which users (upcoming borrowers) can get loans at a collateralization ratio below the 50% which if exceeed would lead to the liquidation of their collaterized asset. Once a user has deposited (WETH) into an AAVE liquiditty pool, then that user will receive an interest bearing token which is a token proportional to the amount that was lended but with the capacity to increae in value due to the associated increasing interest rate that it receives in real-time. These interest bearing token can technically be called AAVE tokens and rightfully so because they are more like a derivative of the original ERC-20 tokens that were deposited by the different lenders across the globe and which the AAVE protocol aggregate forming a liquidity pool, however in this study we will not refer to those "interest bearing tokens" .
AAVE tokens:
When we are using this phase in this study, we will be strictly refering to the ERC-20 token with the symbol/ticker AAVE which was issued in the Ethereum network by the AAVE protocol. The AAVE token has many functions such as: serving as liquidity into an AAVE liquidity pool, also it can be used as collateral to ask for a loan, it can also be used to make improvement proposals for the AAVE protocol and also it can serve in proxy-governance. The AAVE token when staked (into the Safety Module)also serves as a fallback/protection mechanism to be triggered by the community through governance in the case when there has been heavy loses by all participants of the network due to external factors such as chaotic market volatility that cause cascade liquidations that bring havoc to the network, smart-contract vulnerabilities resulting in exploits, etc.