How to DeFi: Beginner

Most tokens aren't accepted as collateral on AAVE. So for many of the popular DeFi, Gaming, and other projects, you don't have an obvious source of liquidity for your assets without selling them.

Insurance cover and options. Example: rolling buys of smart contract cover or short-dated puts on the protocol’s tokens. This could benefit the protocol during Black Swan events like contract hacks, economic exploits, and market drawdowns. 

Thankfully there are other lending protocols that have sprung up to support a broader variety of assets, while being slightly less capital efficient than AAVE and Compound.

Aave is a decentralized non-custodial liquidity market protocol where users can participate as depositors or borrowers.