Another poster here had the same concerns, with his thread that how can you say you made profits, if you never sell?
You need to sell your bitcoin to make money. Without doing that, you only hold without enjoying the fiat money. But if in your country, you can use bitcoin as the payment system, you don't have to sell your bitcoin instead to use bitcoin directly in the local store.
And that is exactly the point. How can you enjoy some of your profits you made during this bull run, while keep on hodling? Because selling now would deprive you of possible future profits.
Perhaps, they have a high target price, so they still hold their bitcoin. They will not sell the bitcoin if the price is not reached the target price. That happens to people who have a big amount of bitcoin, and they don't care about the fluctuation of the bitcoin price because they have the target price. But we don't know what their reason is to do that.
So I would like to know if lending coins like AAVE would be a way to enjoy some of your profits today (life is short, you know) while keeping your portfolio intact?
I don't know much about AAVE and about making a profit from AAVE because I don't try to lending AAVE. Perhaps, you can try to lend your bitcoin in the exchanges, which can really grow your bitcoin amount.
They say that lending coins let you use your assets as collateral, but are these coins geared for longterm loans?
I learn about lending bitcoin before, and I tried to lend my bitcoin to traders at the exchanges. Although the percentage rate changed every day, I can accept that. After all, that still additional profit for me, so I don't mind receiving a small amount of profit. It will works for you in the long term.
Say you would like to borrow 20% of your BTC value today and pay back in a year or two when BTC has risen to the moon?
I don't know for sure about that because I do not borrow bitcoin
You can use Binance to borrow bitcoin in
https://www.binance.com/en/loan, but I don't want to suggest you borrow the money.
But if you want to borrow fiat money, make sure you can repay the money every month.
Who knows more of these lending coins and could explain more in depth how these coins work?
If you want to learn about lending, I suggest you register on Poloniex as I tried to lend on that exchange, but you need to verify your account.
Here is the image of lending in Poloniex: