Top 5 DeFi Strategies Using Aave
Learn how to maximize your crypto yields with popular Aave lending and borrowing strategies. Make smarter decisions with Aavescan data.
Why Use Aave for DeFi Strategies?
Aave is one of the most trusted DeFi protocols for crypto lending and borrowing. Deep liquidity and competitive rates make Aave a popular platform for yields and leverage.
1. Simple Supply and Earn Strategy
Deposit tokens like USDC, DAI, or ETH into Aave and earn passive yield. It’s the easiest way to generate returns, especially for risk-averse investors.
Pro Tip: Use Aavescan to track historical APYs and find assets with high yields.
2. Looping to Maximize APY
Looping is a strategy where you borrow assets against your collateral, swap them back to your original asset, redeposit, and repeat. This increases the size of your position and the potential yield, but also amplifies risk.
- Deposit sUSDe as collateral and earn yield from the underlying sUSDe rewards
- Borrow stablecoins (e.g. USDC) against the sUSDe collateral
- Swap USDC for more sUSDe elsewhere on the market
- Deposit more sUSDe as collateral and earn more yield
- Repeat within your risk limits
Warning: Looping increases liquidation risks. Monitor your interest rates closely using Aavescan Pro.
3. Borrow and Farm Strategy
Borrow stablecoins at a low interest rate on Aave, then deploy them into high-yield DeFi farms or liquidity pools elsewhere.
Example: Borrow USDC at 2% APR, deposit into Ethena sUSDe earning 6%, or a Curve LP earning 7% and pocket the difference.
Stay on top of borrow rates and yield opportunities with live analytics from Aavescan.
4. Flash Loans for Arbitrage
Aave’s flash loans give traders access to huge amounts of liquidity with no upfront capital, perfect for arbitrage and liquidation strategies.
Common flash loan uses:
- Arbitrage between DEXs like Uniswap and Sushiswap
- Liquidate undercollateralized positions on lending protocols
- Refinance your debt across protocols at better rates
5. Banking
Borrow stablecoins (e.g. USDC) against your ETH or wBTC holdings to access liquidity for expenses without selling your assets, potentially deferring taxable events - consult a tax professional for guidance.
Check Aavescan’s historical data to identify which stablecoins have the most attractive APRs.
Why Aavescan Pro Makes a Difference
- Live Rates: Instantly track Aave lending and borrowing rates
- Historical Data: Download CSVs with years of rate history
Start optimizing your DeFi strategy today with Aavescan Pro. Access premium data and tools to stay ahead of the market.
Join our growing community on Discord and discuss strategies with fellow DeFi enthusiasts.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. DeFi strategies involve risks, including the loss of capital. Always do your own research and consult with a professional before making financial decisions.