Tokens sitting in a self-custody wallet earn nothing while you wait for a trade, and lending them through a company means trusting it with your coins. A decentralized lending pool is another route: you deposit tokens into a smart contract, borrowers pay interest to use them, and you hold a token that tracks your claim.
Aave is the biggest of these pools. Supplying there takes four steps: connect a wallet, pick a token in the right market, approve the pool to move it, and confirm the deposit. Your tokens join one shared pool for that asset, which is the core of how Aave works. The pool then mints aTokens to your address as your claim on it.
What is supplying on Aave?
Supplying on Aave means depositing a listed token into a market's liquidity pool, where borrowers pay interest to use it. You receive aTokens for the deposit, such as aUSDC for USDC, which you later burn to take back the token with its interest (source: Aave, Introduction to Aave V3).
aTokens are minted when you supply and burned when you withdraw, and their value is pegged to the supplied asset at a 1:1 ratio. Supplying 100 USDC therefore puts 100 aUSDC in your wallet as soon as the deposit confirms. Interest never arrives as a separate payment, because the aToken balance itself keeps rising: the balance the contract reports already includes the yield earned on your principal (source: Aave, Tokenization). That is why aTokens are interest-bearing tokens you can hold without ever pressing a claim button.
The return shows on screen as the supply APY, short for annual percentage yield, which is the rate you would earn over one year once compounding is counted (source: Investopedia, Annual Percentage Yield (APY)). On Aave that rate is variable: it depends on the borrow utilization rate (the share of the pool that is out on loan) and on settings that Aave governance can change (source: Aave, Supply Tokens). The rate rises when a large share of the pool is borrowed and falls when most of it sits idle (source: Aave, Introduction to Aave V3). The Aave interest rate model turns that utilization into a rate for each reserve.
Here is the math on a round number. If the USDC supply APY held at 5% for a full year, your 100 aUSDC would grow to about 105 aUSDC. Burning them would then give you back about 105 USDC. Rates rarely hold that steady, so treat the figure on the Dashboard as today's rate and check it again before you add more.
Supplying is also a different activity from holding AAVE. AAVE is the governance token. Its holders submit and vote on the proposals that shape the protocol, from upgrades to new features (source: Aave, Introduction to Aave V3). An aUSDC balance is a claim on USDC in one market's pool, so you can supply without ever owning AAVE, and you can hold AAVE without supplying anything.
What you need before you supply
A first supply needs four things lined up: a self-custody wallet, the Aave market for the network your tokens are on, a token that market lists, and enough of that network's gas token to pay for the approval and the supply. Missing any one of them stalls the supply before your deposit goes through.
You interact with Aave by sending transactions from a self-custodial wallet (source: Aave, Introduction to Aave V3). The address that signs is the address that owns the position, so keep the seed phrase offline and open the app from a bookmark you saved yourself. If you are still choosing one, pick a self-custody wallet that supports the network you plan to use.
Aave V3 runs on Ethereum and on networks that include Polygon, Avalanche, Base, Arbitrum and Optimism (source: Aave, Introduction to Aave V3). Each V3 market keeps its own pool of liquidity (source: Aave, Aave v4 Overview). Aave V4 went live on Ethereum mainnet on March 30, 2026. Its markets open in a separate interface called Aave Pro (source: Aave Labs, Aave V4 is Live on Ethereum). The Aave markets and networks list different tokens, so match the network in your wallet to the market in the app.
The token has to appear in the Assets To Supply table of that market and sit in the wallet you connect. USDC on Ethereum and a bridged USDC on another network are different tokens. Coins still held on an exchange need to be withdrawn to your wallet first, on the network that matches the market.
Gas is the fee for running a transaction, and on Ethereum it is paid in ETH. A transaction that fails still pays its gas fee (source: Ethereum.org, Gas and fees). Holding 100 USDC with an empty ETH balance is a common reason the supply button does nothing.
Each check has a ready signal and a common problem:
| What you need | Ready when | Common problem |
|---|---|---|
| Wallet | You can sign from the address that holds the tokens | A seed phrase typed into a fake site |
| Market | The app and the wallet show the same network | Supplying on one network, then checking another |
| Listed token | It shows in Assets To Supply with a balance | A bridged version of the token, or coins still on an exchange |
| Gas | Native token left over after both transactions | The last ETH spent on the token itself |
If the token you plan to supply is AAVE and you do not hold it yet, BloFin lists it on two markets. AAVE/USDT Spot buys the token itself, which you can withdraw to your wallet and supply if AAVE appears in Assets To Supply. The AAVEUSDT Perpetual is a contract on the AAVE price, so it gives you price exposure with no token to deposit. You can buy AAVE on BloFin with USDT and then send it to the wallet you will connect.
Check the maker and taker rates on the BloFin fee schedule before you buy, so you know the full cost.
How to supply tokens on Aave
Supplying in the Aave app takes four steps: press Connect Wallet, choose the token from the Assets To Supply table on the Dashboard, approve the pool to move that token, then enter an amount and confirm the supply transaction. The approval and the supply are separate signatures, and only the second one moves your tokens.
Press Connect Wallet and choose the wallet provider that holds your tokens. On the Dashboard, the Assets To Supply table lists your balances next to each reserve's parameters. Tapping a token's icon opens its reserve details page with the full supply and borrow settings (source: Aave, Supply Tokens).
The approval exists because of how tokens work on Ethereum. ERC-20, the common token standard on Ethereum, lets a holder approve another on-chain account to spend up to a set amount of a token (source: Ethereum Improvement Proposals, ERC-20: Token Standard). The Aave Pool contract needs that allowance before it can pull your tokens. You can grant it with a transaction, which costs a network fee, or with a signature, which carries no network fee (source: Aave, Supply Tokens).
After the approval, type the amount and confirm the second signature, which is the supply transaction that moves the tokens into the pool and mints aTokens to your address. You can then follow the position and the interest it earns from the Dashboard (source: Aave, Supply Tokens).
Say you hold 100 USDC and a small amount of ETH on Ethereum. You connect, check that the app shows the Ethereum market, and press Supply next to USDC. The wallet asks for an approval first, because this address has never let the pool move its USDC. You enter 100, confirm the supply, pay the gas in ETH, and about 100 aUSDC appears once the block confirms. Supply a small amount first if this wallet has never used this market, then send the rest.
A common mistake is stopping after the approval, which only grants permission, so your wallet still holds all 100 USDC and no aUSDC appears until you confirm the supply. Another is spending the last ETH on the approval, so the supply cannot be sent until you top up. A token can also carry a supply cap, a governance limit on the total amount of it that one market accepts (source: Aave, FAQs). A supply that would push the total past that cap does not go through.
Native ETH is a special case, because the protocol stores it as wrapped ETH, or WETH (source: Aave, Withdraw Tokens). A deposit of ETH therefore shows up as aWETH, the aToken whose underlying asset is WETH (source: Aave, Tokenization). Read the asset name on the confirmation screen before you sign.
Each step matches a label in the app:
| Step | Label in the app | What happens | What to check |
|---|---|---|---|
| 1 | Connect Wallet | The app reads your address and balances | The network matches your wallet |
| 2 | Assets To Supply | You pick the token and see its live APY | The token has a balance on this market |
| 3 | Approve | The pool gets an allowance for that token | The amount and the spender in the wallet pop-up |
| 4 | Supply | Tokens move into the pool and aTokens are minted | The asset name and the gas fee |
How collateral works after your first supply
On Aave V3, an eligible first supply of a token is switched on as collateral automatically, so it starts counting toward your borrowing power as soon as the deposit confirms. Collateral on its own creates no loan, so you only need it on if you plan to borrow, and you can switch it off under Your Supplies.
The switch flips inside the supply transaction itself. When an address supplies a token for the first time, the protocol marks it as collateral for that address, as long as the token can be used as collateral (source: Aave, SupplyLogic.sol). Eligible means governance has given the token a loan-to-value above zero, because a token with an LTV of zero cannot be enabled as collateral (source: Aave governance, Aave v3.6). Later supplies of the same token keep whatever setting you chose while you still hold some of it.
Collateral starts to matter once you borrow. Loan-to-value (LTV) is the highest ratio at which you can open a new borrow against your collateral. The health factor shows how safe that borrow is: above 1 the collateral covers it, below 1 the position is at risk of liquidation. The liquidation threshold is the collateral ratio at which liquidation of a borrow becomes possible (source: Aave, Toggle Collateral Status). If you do plan to borrow against your supply, keep the health factor well above 1. Below it, another user can liquidate the position on Aave by paying back the debt and taking a share of your collateral (source: Aave, Introduction to Aave V3).
Take 0.5 WETH supplied on Ethereum with collateral on. With no borrow open, there is nothing to liquidate, since liquidation applies to an open borrow position that falls below its collateral requirements (source: Aave, Introduction to Aave V3). Borrow USDC against that WETH, and a fall in the ETH price now lowers your health factor. That is the point where the automatic switch starts to carry real risk.
To change the setting, open Your Supplies, find the token and flip its collateral switch, then confirm the transaction in your wallet (source: Aave, Toggle Collateral Status). Switching collateral off runs the usual health factor check, so the protocol blocks the change when it would push an open borrow below its collateral requirement. Withdrawing your entire balance of a token turns its collateral status off on its own (source: Aave, SupplyLogic.sol).
Each collateral setting changes what you can do and what you risk:
| Collateral setting | What you can do | Risk you take on |
|---|---|---|
| On, no borrow (default after an eligible first supply) | Earn the supply APY and withdraw up to available liquidity | No liquidation while no loan is open |
| On, with a borrow | Borrow up to the LTV | Liquidation if the health factor falls below 1 |
| Off | Earn the supply APY | The token adds nothing to borrowing power |
How to withdraw your supply on Aave
Withdrawing reverses the supply: you burn aTokens, and the pool sends back the underlying token with the interest it earned. In the app you connect the same wallet, open Your Supplies on the Dashboard, pick the token, enter an amount and confirm. The pool's available liquidity caps how much you can take out.
- Connect the wallet that holds your supplied position.
- Open the Dashboard and find Your Supplies.
- Select the token you want to withdraw.
- Check the available liquidity and, if the token backs a loan, the effect on your health factor.
- Enter the withdrawal amount.
- Confirm the withdrawal transaction in your wallet (source: Aave, Withdraw Tokens).
That cap comes from the way the pool lends. You can withdraw as much as the pool holds that nobody has borrowed, with your accrued interest on top (source: Aave, Withdraw Tokens). When utilization is high, rates climb, which pulls in new supply and pushes borrowers to repay (source: Aave, Introduction to Aave V3). A withdrawal that is too large for the pool today can go through once enough is repaid or supplied, and in the meantime you can take out a smaller amount. That wait is one of the risks of using Aave to weigh before you supply money you may need at short notice.
If you supplied WETH and you withdraw WETH, no extra approval is needed. If you want native ETH back, the WrappedTokenGateway contract unwraps the WETH and sends the ETH in a single transaction (source: Aave, Withdraw Tokens). ETH and WETH arrive as different assets in your wallet even though they track the same price, so check which one the confirmation screen shows.
A token that backs an open borrow carries one more limit. You may have to repay part of the loan or supply other collateral before the withdrawal goes through, because pulling collateral out lowers your health factor. The app also has a withdraw and switch option that swaps the withdrawn token into another one in a single action. That option needs token approvals for both parts (source: Aave, Withdraw Tokens).
Four limits decide whether a withdrawal goes through today:
| Limit | What it means | What you can do |
|---|---|---|
| Available liquidity | Only tokens that are not on loan can be withdrawn | Withdraw less, or wait for repayments and new supply |
| Gas on the same network | The withdrawal is an on-chain transaction | Keep some native token in the wallet |
| Open borrow | Removing collateral lowers the health factor | Repay part of the loan or add other collateral first |
| ETH versus WETH | ETH comes back through the WrappedTokenGateway | Check which asset the confirmation screen shows |
Make your first withdrawal a small one, the same way you tested the supply, and confirm that the token arrives on the network you expect before you move the rest. If the token you withdraw is AAVE, you can also send it to an exchange account when you want to sell it or trade its price.
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
When do supplied tokens start earning interest on Aave?
Supplied tokens start earning as soon as the supply transaction confirms, and the balance then climbs steadily over time at the current market supply rate (source: Aave, Supply Tokens). Because the rate is recalculated every time someone supplies, borrows, repays or withdraws, the amount added over a day shifts with activity in the pool. The Dashboard shows the running total, which is the figure to compare against the amount you deposited.
Can I send my aTokens to another wallet?
aTokens can be stored, transferred or traded, because they carry the standard token functions such as transfer and approve (source: Aave, Tokenization). Sending them moves your claim on the pool, interest included, to the new address. If those aTokens back a borrow, the transfer first runs a health factor check, and the protocol rejects it when the loan would end up short of collateral (source: Aave, SupplyLogic.sol). Since Aave v3.6, a transfer no longer turns collateral on for the receiving address, so a receiver not already using that token as collateral switches it on under Your Supplies before it adds borrowing power (source: Aave governance, Aave v3.6).
What happens if I send tokens straight to the Aave contract?
A plain token transfer to a contract address can lose the tokens for good, because the ERC-20 standard gives the receiving contract no notice that anything arrived. ERC-20 tokens worth at least $83,656,418 had been lost that way by June 20, 2024. Deposits into a contract are meant to use the approve and transferFrom pattern (source: Ethereum.org, ERC-20 Token Standard). Aave's supply function runs exactly that pattern, pulling your tokens with transferFrom once you have approved it (source: Aave, SupplyLogic.sol). Always supply through the app, and never paste the pool address into a send screen.
Does Aave V4 change how supplying works?
Aave V4 changes where supplied liquidity sits, because it uses a Hub and Spoke model. A Liquidity Hub holds the funds and does the accounting for the whole protocol. Spokes are modules built for specific supply and borrow uses, each with its own risk settings. You deal with a Spoke, which routes your tokens to and from the Hub, so every connected Spoke can reuse the same liquidity. Governance can then add markets without moving that liquidity. Your supplied assets still earn interest over time, and the health factor of a borrow still has to stay above 1 (source: Aave, Aave v4 Overview).
Can I lose money supplying on Aave?
Supplying carries real risks on Aave, because a contract can have a bug and the token you supplied can fall in price while it sits in the pool. Aave's current backstop is Umbrella, where people stake aTokens or GHO for rewards, and those stakes are used to cover deficits (source: Aave Docs, Umbrella). That backstop shrinks the damage from a shortfall without promising to cover every loss. Size your first supply so that a contract failure would hurt without wrecking your finances, and add more only after the withdrawal test has worked.
Why are my tokens still in my wallet after I approved Aave?
An approval gives the Aave Pool permission to move your tokens, while the supply transaction is the separate step that deposits them. After approval, you still need to enter the supply amount and confirm that transaction in your wallet. Interest begins once the supply goes through (source: Aave, Supply Tokens). Check which transaction you completed before starting again, so you can finish the deposit you intended without mistaking an allowance for a supplied balance.
Researched and written by the BloFin Academy editorial team with AI-assisted drafting. Primary sources include Aave help on supplying, withdrawing and collateral settings, the Aave V3 introduction, Aave V3 tokenization documentation, the Aave V3 SupplyLogic contract on GitHub and the Aave v3.6 governance proposal. They also include the Aave FAQs, the Aave V4 overview documentation, the Aave Labs V4 launch post, the ERC-20 token standard on Ethereum Improvement Proposals and Ethereum.org, the Ethereum.org gas page, and Investopedia on APY. 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.