Proposal: Add Aave (LEND) yVault

Summary:

Add Aave (LEND) as an asset to be used as collateral in delegated yVaults.

Abstract:

Add Aave (LEND) as an asset to be used as collateral in delegated yVaults.

Motivation:

Additional assets are necessary in order to generate more revenue for the protocol and grow the ecosystem. This proposal nominates LEND as an asset to be used as collateral. The strategies for LEND are plentiful thanks to their asset lending ecosystem and will be quick to launch. LEND is also a top 3 project within the DeFi ecosystem https://www.coingecko.com/en/defi

Specification:

DeFi enthusiasts are currently depositing 100MM within hours into unproven “meme” farms, because it gives them an opportunity to put quality assets they believe in (YFI, LINK, SNX, LEND, ETH) to work while maintaining full exposure to the underlying asset. yVaults can provide them more security and confidence than recent yield farming projects. I won’t describe the actual investment strategy behind this particular yVault, but I’m confident the opportunities are there for Andre to maximize return.

For:
Add LEND as an asset to be used in delegated yVaults.
Against:
Don’t add LEND as an asset to be used in delegated yVaults.
Poll:

  • Add LEND vault
  • Don’t add LEND vault

0 voters

5 Likes

What’s the yield strategy you’re imagining with Aave? I love the project, but I don’t see any obvious way to farm it. In fact, only strategy I can think of, is using a sort of leveraged Cream farm, but the liquidity is too thin for a vault to do that.

@0xmt Currently LEND can be deposited at aave.com to borrow against it. At aave.com you don’t necessarily borrow 1:1 assets, all of your deposited assets are pooled to improve your liquidation ratio. A yVault with enough capital can maintain a healthy liquidation ratio and borrow a yield producing asset which can be invested elsewhere.

4 Likes

Ah, gotcha’ so it’d work kind of like the proposed link vault?

This is a great idea– although I think this would also require new LEND strategies to be developed, but I’m guessing that wouldn’t be difficult to modify the existing one for aLINK. In this case, probably use aLEND, not LEND, right?

Yes, aLEND would work. That’s up to @andre.cronje how to implement best strategy.

Realistically if you’re using aLEND then it seems like it would be plug-and-play pretty much exactly with the aLINK strategy, but yeah I’ll let people who know much more about this shit decide that lol

2 Likes

Added poll to original post.

Would need to be adjusted to be slightly less aggressive, as LEND has a lower LTV and higher collateralization factor than LINK, though it should only be marginally so.

Similar profit mechanism as @ChainLinkGod describes here for LINK:

3 Likes

LEND is unavailable to deposit on AAVE until after the token migration LEND---->AAVE happening soon

1 Like

@jrrrrrrr I think you can still deposit LEND https://app.aave.com/reserve-overview/LEND-0x80fb784b7ed66730e8b1dbd9820afd29931aab030x24a42fd28c976a61df5d00d0599c34c4f90748c8

From their telegram this morning:
image

New strategy may develop after you can stake AAVE in their v2 platform.

2 Likes

@andre.cronje would this vault be difficult to implement if approved?

Sentiment poll seems overwhelmingly positive after 4 days maturity. @moderators is it possible to move this to a proper YIP? I don’t have the smart contract coding skills to do so.

2 Likes

Since LEND will migrate to AAVE soon best to wait for that then hit this up.

1 Like

Perhaps @Stani can provide insight about whether the code would be meaningfully different between a LEND vs AAVE vault– and whether or not moving forward with the vault would be worth it before the transition?

1 Like

We could also just go ahead and put a YIP together for AAVE and pass it so it’s queued up

2 Likes

So an idea, and just playing devil’s advocate a bit since there does seem to be good interest in this vault– is there any reason why we couldn’t move forward with making a LEND vault that transitions to an AAVE vault?

It seems like all that needs to happen for the Aavenomics transition is the LEND needs to be redeemed for AAVE, 100:1. Assuming the vault works like all others, we simply will get yAAVE when we deposit and use that to redeem our inflated share of tokens when we want to cash out of the vault.

So– couldn’t the vault just do the migration for us? It would be holding all of the tokens anyway, and they could just freeze withdrawals/deposits of LEND an hour before redeeming, redeem all of the vault’s LEND for AAVE, and then reopen deposit/withdrawal of AAVE.

I don’t want to make things unnecessarily difficult on the people who actually have to code these things, but just thought I would put the idea out there.