AAVE is used as the centre of gravity of Aave Protocol governance. AAVE is used to vote and decide on the outcome of Aave Improvement Proposals (AIPs). Apart from this, AAVE can be staked within the protocol Safety Module to provide security/insurance to the protocol/suppliers. Stakers earn staking rewards and fees from the protocol.

Documentation on tokenomics and governance is available in the flash paper and with further detail in the full documentation. Feel free to join the discussion in the governance forum.