Aave operates as a decentralized money market protocol enabling users to lend and borrow cryptocurrency using 20 different assets as collateral. The protocol introduces a native token known as AAVE, which serves as both a governance token and a means for the community to collectively influence the protocol's direction. Lenders have the opportunity to earn interest by supplying liquidity to the market, whereas borrowers can collateralize their cryptoassets to obtain loans from the liquidity pools.