Platform: AAVE
Category: Lending & Borrowing
Recommended Capital: $500+
Time To Set Up: 15 mins
How Does It Work? 🤔
Code that connects borrowers & lenders without either parties knowing who they are borrowing or lending from.
- It is essentially different pools of different cryptocurrencies.
- liquidity in these pools comes from lenders
- in order to borrow from these pools, you must be deposit collateral worth more than the loan.
How To Start Earning Interest:
Browse AAVE's markets, to see the different APY (annual percentage yield) rates on coins. (Browse different networks to find best rates)
👉 10% APY means if you deposit $1000 USD Coin, in 1 year your ROI profit would = $100
👉 All borrow and lending rates are decided by raw demand and fluctuate organically.
👉 You can pull out your deposit at ANY time. (unless you have a loan out)
👉 Your balance increases every second (from interest).
2. Once you've chosen your deposit currency of choice, load up your MetaMask with it. (Don't forget to add ETH for gas as well
Terms to know:
👉 Deposit APY = How much % you'll earn on your deposit per year.
👉 Total Borrowed = How much $ from the pool is currently loaned out.
👉 Available Liquidity = How much $ from the pool is currently available for loans.
👉 Utilisation rate = How much $ from the pool is currently available for loans.
👉 Reserve Size = How much $ in total is inside the pool (borrowed out + unborrowed)
(don't worry about the numbers all the way at the bottom, they're for borrowers)
3. Choose which coin you want to deposit & earn interest on
4. Click the "Supply" button as shown in the picture below:
5. You will be asked to first approve ALL future deposits, click approve and pay the gas fee. (2 transactions - 1 approve, 2 supply)
7. All done! - Now you can head to your dashboard and watch your balance grow by the second!
