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Using #defi .. This is going to seem intense but I promise if you can get through this, it will open up a whole world of new #possibilities First up, Aave. (leave a comment if you want me to cover a specific DeFi protocol) What is Aave? Aave is a decentralised non-custodial liquidity market protocol where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers are able to borrow in an overcollateralised (perpetually) or undercollateralised (one-block liquidity) fashion.. Why Aave? Aave Protocol has been audited and secured. The protocol is completely open source, which allows anyone to interact with an user interface client, API or directly with the smart contracts on the #ethereum network. Being open source means that you are able to build any third-party service or application to interact with the protocol and enrich your product. How do I interact with Aave protocol? In order to use to interact with Aave protocol, you simply deposit your preferred asset and amount. After depositing, you will earn passive income based on the market borrowing demand. Additionally, depositing assets allows you to borrow by using your deposited assets as a collateral. Any interest you earn by depositing funds helps offset the interest rate you accumulate by borrowing. What is the cost of interacting with Aave protocol? Interacting with the protocol requires transactions and so transaction fees for Ethereum Blockchain usage, which depend on the network status and transaction complexity. Where are my deposited funds stored? Your funds are allocated in a smart contract. The code of the smart contract is public, open source, formally verified and audited by third party auditors. You can withdraw your funds from the pool on-demand or export a tokenised (aTokens) version of your lender position. aTokens can be moved and traded as any other cryptographic asset on Ethereum. Is there any risk? No platform can be considered entirely risk free. The risks related to the Aave platform are the smart contract risk (risk of a bug within the protocol code) and liquidation risk (risk on the collateral liquidation process). Every possible step has been taken to minimise the risk as much as possible-- the protocol code is public and open source and it has been audited. Additionally, there is an ongoing bug bounty campaign live and running. Aave (AAVE) token 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/depositors. Stakers earn staking rewards and fees from the protocol. Depositing & Earning How do I deposit? Browse to the "Deposit" section and click on "Deposit" for the asset you want to deposit. Select the amount you'd like to deposit and submit your transaction*. Once the transaction is confirmed, your deposit is successfully registered and you begin earning interest. How much will I earn? aTokens holders receive continuous earnings that evolve with market conditions based on: The interest rate payment on loans - depositors share the interests paid by borrowers corresponding to the average borrow rate times the utilisation rate. The higher the utilisation of a reserve the higher the yield for depositors. Flash Loan fees - depositors receive a share of the Flash Loan fees corresponding to .09% of the Flash Loan volume. Each asset has its own market of supply and demand with its own APY (Annual Percentage Yield) which evolves with time. You can find the average annual rate over the past 30 days to evaluate the rate evolution, and you can also find more data on the reserve overview of each asset in the home section on the app. Is there a minimum or maximum amount to deposit? You can deposit any amount you want, there is no minimum or maximum limit. Still, it's important to take into account that for really low amounts it is possible that the transaction cost of the process is higher than the expected earnings. It is recommended that you consider this when depositing very low amounts. Can I borrow using stable and variable rate at the same time for one asset? No, you can only borrow using stable or variable rate, if you switch to your desired rate it will switch the rate for your whole debt on that asset. Despite this, you can have different borrow rates for different assets. How do I withdraw? To withdraw you need to go to the "Deposit" section in the dashboard and click on “Withdraw”. Select the amount to withdraw and submit the transaction. Also, you can use your “aTokens" as liquidity without withdrawing. Can I opt-out my asset from being used as a collateral? Yes. After depositing your assets, you are able to unselect the asset so that it will not be used as collateral. The opt-out is available in the "Deposit" section within your dashboard. Simply switch the "use as collateral" button on the asset you would prefer to opt-out from being used as a collateral. * You can withdraw your assets without opting out of using them as collateral, as long as those funds are not actively being used to borrow and the withdrawal would cause a liquidation on your loans. Sources https://aave.com/ Not financial advice. DYOR. DCA. BTD. HODL. #crypto #cryptocurrency #crypocurrencies #cryptoaddict #cryptoalert #cryptobeliever #bitcoin #ethereum #cardano #public #publiccommunity #dyor #longterm #growth #learningtoinvest #feedyourbrain #learning #learningaboutcrypto #possibilities #newinvestor #tech #technology Join Celsius Network using my referral code 130879c68d when signing up and earn $50 in BTC with your first transfer of $400 or more! #unbankyourself - https://celsiusnetwork.app.link/130879c68d
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