Many of the largest protocols in decentralized finance (DeFi) hand control of their rules to whoever holds a particular token, so buying that token looks like buying a say in how the protocol is run. Two tokens under the same label can still carry different voting rules, setup steps, and exposure to losses.
Those tokens are called governance tokens, and four of the best known are AAVE, UNI, MKR, and COMP. Each one carries votes over its own protocol. AAVE adds a second element, because its staked form, stkAAVE, was designed as a backstop for bad debt, a role Aave has since handed to a newer system called Umbrella.
What are AAVE, UNI, MKR, and COMP?
AAVE, UNI, MKR, and COMP are governance tokens, which means holding one gives you a vote on how a DeFi protocol changes. AAVE governs the Aave lending protocol, UNI governs Uniswap, and COMP governs Compound. MKR governed MakerDAO, the organization behind the DAI stablecoin, until MakerDAO rebranded as Sky in August 2024 (source: Wikipedia, Dai).
AAVE is the governance token of the Aave lending protocol, where you supply crypto to earn interest or borrow against collateral you have deposited. Holders vote on new features, parameter changes, and other decisions about the protocol, and every successful on-chain vote waits in a timelock before it executes (source: Aave Help, Voting). The AAVE token also trades as an asset in its own right, so its price moves whether or not you ever vote.
UNI holders manage and upgrade the Uniswap protocol. Their governance can spend from the Uniswap treasury, which received 40% of all UNI when the token launched in 2020. It can also mint new UNI, up to 2% of circulating supply each year (source: Uniswap Developers, Governance Overview).
COMP holders govern Compound through three contracts: the COMP token, a voting module called Governor Bravo, and a Timelock that holds each passed proposal for a set delay before it takes effect. Proposals can change system parameters, list new markets, or add new functions to the protocol. COMP holders also choose a Pause Guardian, held by a community multisig wallet, which can disable minting, borrowing, transfers, and liquidations in an emergency. Even then, the Pause Guardian can never stop users from redeeming or repaying (source: Compound v2 Docs, Governance). Because Aave and Compound are both lending protocols, COMP is the closest match to AAVE among the four.
MakerDAO was run by the holders of MKR, who proposed and voted on changes to parameters in the smart contracts behind DAI, with each vote weighted by the amount of MKR held. Interest that DAI borrowers paid was used to buy MKR on the market and burn it, a design meant to make the token deflationary as lending revenue grew (source: Wikipedia, Dai).
How voting power is counted for each token
Aave counts the votes you hold by default, while UNI and COMP count only once you delegate them. Your Aave voting power is proportional to the AAVE you hold or receive by delegation on Ethereum mainnet, together with any stkAAVE and aAAVE held or delegated the same way (source: Aave Help, Voting). A wallet balance therefore already votes.
Aave adds the three forms into one figure for each address. stkAAVE is AAVE staked in the Safety Module, and aAAVE is the aToken, an interest-bearing balance, that you receive when you supply AAVE to the Ethereum V3 market. Each form carries two separate powers: proposal power for creating a proposal and voting power for voting on one. You can hand both to the same Ethereum address or split them between two different addresses (source: Aave Docs, Governance).
Suppose you hold 600 AAVE in your wallet, 300 stkAAVE, and 100 aAAVE, all on Ethereum mainnet. Your address then carries 1,000 units of voting power and 1,000 units of proposal power, and you could delegate the proposal power to someone you trust while you keep the voting power and cast it yourself. Bridge the 600 AAVE to another network, or send it to an exchange, and your figure drops to 400, because only Ethereum mainnet balances in your own address count.
UNI reverses that default, because a UNI balance carries no vote until you activate it by assigning its voting power to an address, which can be your own. The addresses that receive that power vote as delegates (source: Uniswap Developers, Governance Overview).
COMP follows the same delegate model: you can delegate to yourself or to one other address at a time, and the delegate gains votes equal to your COMP balance, which adjust automatically whenever that balance changes. Creating a proposal takes more than 25,000 delegated COMP, a threshold that governance itself can change (source: Compound v2 Docs, Governance).
The practical difference is easy to overlook, even for holders who already know how Aave governance moves a proposal from forum post to execution. A UNI or COMP holder who never delegates has no say at all, while an AAVE holder who never opens a governance screen still holds voting power that is ready to cast or to delegate. To use that power, vote with your AAVE from the wallet that holds it, through a governance interface such as the Aave Labs app, the BGD Labs interface, or Tally (source: Aave Help, Voting).
The Safety Module, stkAAVE, and Umbrella
A backstop is capital set aside to absorb bad debt, the loss left when a borrower's collateral no longer covers the loan. On Aave, stkAAVE was designed as that backstop, because the Safety Module staked AAVE as insurance against a shortfall and paid stakers rewards for accepting the risk of slashing (source: Aave Docs, Glossary).
Slashing is the reduction of staked tokens to cover a shortfall, and Aave has since cut that risk to zero for stkAAVE. The maximum slash on stkAAVE stood at 0% by February 2026, when the Safety Module's Balancer pool token, stkABPT, still carried a 10% maximum (source: Aave Governance, Aave DAO Funding Insights). On March 23, 2026, governance executed AIP 459, which cut the stkAAVE cooldown from 7 days to 2 days and lowered slashing on the Balancer pool token module from 10% to 0% (source: Aave Governance, AIP 459).
With a 0% maximum, a stkAAVE balance cannot be cut to repay bad debt unless a future vote raises that limit. Holding stkAAVE today keeps your full voting power and still earns staking rewards, without the slashing risk the module was originally built around.
Umbrella now covers deficits. It is an automated system in which you stake aTokens such as aUSDC, aUSDT, or aWETH, or the GHO stablecoin, and when a deficit appears in one asset, the matching staked assets are burned to offset it without waiting for a governance decision. Each stake covers only its own asset on its own network. Leaving Umbrella takes a 20-day cooldown followed by a 2-day unstake window (source: Aave Docs, Umbrella). Liquid AAVE is neither an aToken nor GHO, so the backstop on Aave now runs on supplied assets and GHO while AAVE keeps the vote.
Suppose you hold 500 stkAAVE and also stake 10,000 aUSDC in Umbrella on Ethereum. A USDC deficit on Ethereum that passes its configured offset would burn part of your staked aUSDC (source: Aave Docs, Umbrella). Your stkAAVE would stay whole and keep counting toward your votes. The mistake to avoid is staking AAVE because an older guide calls stkAAVE the protocol's insurance, then expecting to be paid for a cover role that now belongs to Umbrella stakers.
If you already hold stkAAVE, you can unstake it from the Safety Module after its cooldown and keep voting with the AAVE you get back. To earn rewards for covering deficits, stake in Aave Umbrella with an aToken you already supply.
AAVE, UNI, MKR, and COMP side by side
Side by side, the four tokens differ less in what a vote decides and more in how a vote is activated and what else each token was built to do. On the Aave side, the extra feature is a staked form designed to cover the protocol's bad debt, and that cover now comes from Umbrella stakers.
| Token | Protocol | When your balance votes | Extra role of the token or its holders |
|---|---|---|---|
| AAVE | Aave lending protocol | AAVE, stkAAVE, and aAAVE held or delegated on Ethereum mainnet count by default | stkAAVE was designed as a backstop; its maximum slash is 0%, and Umbrella stakers now cover deficits |
| UNI | Uniswap | After you assign its voting power to an address | Governance can spend from the treasury and mint up to 2% more UNI a year |
| COMP | Compound | After you delegate to yourself or one other address | Holders choose the Pause Guardian that can halt minting, borrowing, transfers, and liquidations |
| MKR | MakerDAO, now Sky | Weighted by the MKR each holder held | DAI interest was used to buy and burn MKR |
Start from what you need the token to accomplish: if you want a vote with no setup, AAVE is the only one of AAVE, UNI, and COMP whose wallet balance counts before any delegation step. Supplying AAVE to Aave keeps that vote, because aAAVE runs on a custom aToken built with delegation support (source: Aave DAO, v3.4 features). If you want to earn rewards for protecting a lending protocol, the asset to stake on Aave is a supplied asset or GHO in Umbrella, while AAVE stays a voting token.
The most common failure involves a holder who buys UNI or COMP, never delegates, and then finds the balance missing from a vote that mattered. The AAVE version of that mistake runs the other way: you buy AAVE on an exchange and expect it to vote, when the exchange's address holds the token and your own address holds nothing.
If your interest in AAVE is its price more than its vote, another way to hold it is on BloFin, where AAVE/USDT Spot buys the token itself and the AAVEUSDT Perpetual is a contract that tracks its price. Check the maker and taker rate for your tier on the BloFin fee schedule before you size an order on either one.
Exchange balances and governance actions
An exchange balance of AAVE gives you price exposure but no vote, because Aave counts tokens held in, or delegated to, your own address on Ethereum mainnet. To turn a trade into voting power, you move the AAVE into a wallet you control and then decide whether to hold it, supply it, or stake it.
The sequence from an exchange purchase to a cast vote runs in four steps:
- Buy AAVE on the AAVE/USDT Spot market, following the order steps in how to trade AAVE on BloFin.
- Withdraw it from BloFin to a wallet you control, picking Ethereum as the withdrawal network so the balance lands where Aave counts it. If it arrives on another network, bridge it to Ethereum before the vote.
- Keep it as AAVE to vote straight away, supply it to the Ethereum V3 market to hold aAAVE and earn supply interest, or stake it for stkAAVE if you accept the cooldown.
- Vote or delegate from that wallet through a governance interface, and check that the balance appears before an on-chain vote opens.
An AAVEUSDT Perpetual position never turns into voting power at any step, because you never own the token. The contract tracks the AAVE price, and you keep AAVE perpetual futures open by holding enough margin and paying or receiving funding.
The order also matters if you plan to stake, because stkAAVE votes like AAVE but turning it back into liquid AAVE means waiting out the cooldown first. Stake only the part you are willing to leave locked, and keep the rest liquid if you may want to sell on short notice.
Looking to trade AAVE tokens on BloFin? To get started, you'll need to first create a BloFin account, fund your account with cryptocurrency, then open the AAVE/USDT Spot trading page or the AAVEUSDT Perpetual page.
Frequently asked questions
Does stkAAVE still give a discount on GHO borrowing?
The stkAAVE discount on GHO borrowing was removed by the Aave v3.4 upgrade. Onchain data had shown that only a very small group of borrowers ever used it, and dropping it let GHO behave like every other asset listed on Aave, with far less special code and lower gas costs. Any pending discount was lost when the upgrade executed. A discount could still be rebuilt on top of the protocol through rewards, for example by paying GHO rewards to stkAAVE holders (source: Aave DAO, v3.4 features).
Why have AAVE buybacks stopped?
AAVE buybacks paid for by the Aave DAO have been paused since April 19, 2026, the day after an attacker exploited the rsETH bridge route that Kelp ran over LayerZero and pushed unbacked rsETH into Aave V3 markets on several chains. Holding DAO revenue back from the market keeps the treasury able to join a coordinated response if one becomes necessary. The pause lasts until the rsETH situation is clearer, and any restart is to be announced in the DAO's regular funding update (source: Aave Governance, ARFC Pause AAVE Buybacks).
Can you vote on Aave from a network other than Ethereum?
Aave proposals can be voted on from lower-cost Voting Networks, for example Avalanche C-Chain or Polygon PoS, while your tokens stay on Ethereum mainnet. Your balances and delegations remain recorded on Ethereum, and the voting network checks them with storage proofs, so there is nothing to bridge. Smart contract wallets that cannot sign the messages this method needs can name a voting representative, which then casts votes on their behalf using the delegated power (source: Aave Docs, Governance).
How long does an Aave proposal take compared with a Compound proposal?
An on-chain Aave proposal waits one day before voting opens. Most proposals go to the Short Executor, with a three-day vote and a one-day timelock, while changes to governance itself go to the Long Executor, with a 10-day vote and a seven-day timelock (source: Aave Help, Voting). A Compound proposal moves through a two-day review, a three-day vote, and a two-day timelock, so any change to that protocol takes at least one week from creation (source: Compound v2 Docs, Governance).
How many votes does an Aave proposal need to pass?
An Aave proposal passes when its votes reach quorum and the yes side also leads the no side by a set margin, called the differential. AIP 459, a minor Level 1 proposal, needed 320,000 votes to reach quorum and a lead of 80,000 votes; it closed with about 606,000 AAVE in favor and 34 against (source: Aave Governance, AIP 459). A Compound proposal needs a majority with at least 400,000 votes cast in favor before it is queued (source: Compound v2 Docs, Governance).
Does Umbrella protect every Aave market?
Umbrella began on Ethereum and is set to expand to other networks, starting with assets in high borrowing demand such as USDC, USDT, WETH, and GHO. The Aave DAO sets the reward rates and target liquidity for each deployment, and the Aave Finance Committee handles ongoing management. A first-loss offset sits in front of stakers: on USDT, the DAO absorbs bad debt up to 100,000 USDT, and stakers absorb only the part above that amount (source: Aave Docs, Umbrella).
Researched and written by the BloFin Academy editorial team with AI-assisted drafting. Primary sources include Aave Help and Aave Docs pages on voting, governance, the glossary, and Umbrella, Aave governance proposal AIP 459, the Aave DAO Funding Insights and Pause AAVE Buybacks forum posts, the Aave v3.4 features document in the Aave DAO code repository, the Uniswap and Compound governance documentation, and the Wikipedia entry on Dai. All facts independently verified against cited documentation current as of October 2026.
This article is for informational and educational purposes only. It is not financial, investment, trading, or legal advice. Cryptocurrency can lose value. Borrowing on Aave can lead to liquidation if the health factor drops below 1. Spot AAVE/USDT buys the token. An AAVEUSDT Perpetual is a contract on the price. Do your own research. Consider your circumstances before using any protocol or trading any asset.