Introduction

The Aave protocol is a decentralized lending platform built on the Ethereum blockchain. It allows borrowers to access liquidity without the need for a traditional intermediary such as a bank. Instead, users can deposit cryptocurrencies as collateral and borrow other cryptocurrencies at variable or fixed interest rates.

Borrowers on the Aave platform are users who want to access liquidity by taking out a loan. These borrowers can borrow various cryptocurrencies based on the value of the collateral they deposit. Borrowers can be individuals or organizations seeking to access funds for various purposes, such as trading, investing, or simply to meet their financial needs.

One of the key features of Aave is its focus on creating a seamless borrowing experience for its users. The platform offers a variety of borrowing options, including variable and stable interest rates, as well as flash loans, which allow borrowers to access funds instantly without requiring collateral. This flexibility has made Aave a popular choice among borrowers who are looking for fast and easy access to funds.

Aave's borrowers come from a diverse range of backgrounds, including individuals, institutions, and businesses. They use the platform to borrow digital assets for a variety of purposes, such as investment, trading, or paying bills. Aave's lending platform has proven to be an attractive option for borrowers looking for competitive interest rates, as well as a safe and secure lending environment.

Methods

To calculate borrowing activity on Aave, we will use data from the Flipside Crypto platform. Specifically, we will analyze the data for the Aave Protocol and focus on the borrowing activity of its users.

First, we will track the number of unique addresses that interact with the Aave smart contracts over time. This will allow us to observe the evolution of borrowers on the platform and identify trends in borrowing activity.

Next, we will analyze the behavior of borrowers by tracking key metrics such as the amount borrowed, the length of the loan, the interest rates paid, and the repayment behavior of borrowers. This analysis will help us to better understand the risk profile of borrowers and identify areas where the Aave protocol can be improved to better serve the needs of its users.