What is Aave ETH v1?

Aave ETH is an interest-bearing token created when Ethereum (ETH) is deposited into the Aave protocol and is burned upon redemption. It is pegged 1:1 to the value of the underlying ETH deposit, allowing for straightforward storage, transfer, and trading.

While the ETH is lent out to borrowers, the aETH token earns interest in real-time and is credited directly to the wallet of the holder. This mechanism enables users to benefit from interest accumulation on their deposits.