KEY TAKEAWAYS
- Aave launches version 3.2, introducing Liquid eModes for advanced DeFi strategies.
- Users can now leverage staking and restaking rewards with stETH on Aave’s platform.
- Liquid eModes allow wstETH to be used across multiple market configurations, enhancing flexibility.
- This update significantly expands strategic possibilities for DeFi participants.
Starting today, Aave has introduced deposits and borrows on the Lido Aave V3.2 market, marking a significant development for decentralized finance (DeFi) participants. This update allows users to engage in new strategies by leveraging staking and restaking rewards with stETH on Aave’s Liquid eModes. By providing Liquid Restaking Tokens (LRTs) as collateral, users can borrow wrapped stETH (wstETH) while also earning Aave rewards.
To explore these new opportunities, users can visit the Aave app at app.aave.com.
What’s New in Aave v3.2?
Aave, a leading lending protocol, has unveiled version 3.2, featuring Liquid eModes—a transformative feature for users seeking advanced reward strategies. This new functionality allows for the granular isolation of assets, enabling users to provide liquid restaking tokens and borrow wstETH on the Lido – Aave market. This opens up access to innovative strategies for DeFi enthusiasts.
Understanding Lido’s stETH and Aave’s Liquid eModes
Lido’s stETH is a rebasable utility token representing a user’s share of ETH staked through the Lido protocol. Unlike wstETH, stETH provides holders with accrued ETH staking rewards, reflected through a daily supply rebase, which increases the supply of stETH as staking rewards are generated. More information on stETH can be found here.
Aave v3.2 introduces Liquid eModes, a feature that allows wstETH to be eligible for multiple efficiency modes (eModes) simultaneously. This means wstETH can now be utilized across different market configurations with optimized parameters for each use case. This advancement provides users with enhanced flexibility and efficiency in their DeFi strategies.
Why This Matters
The introduction of recursive staking and restaking strategies with stETH through Aave’s Liquid eModes significantly expands the use-cases for stETH. This development opens up various strategic possibilities for DeFi enthusiasts, enhancing the potential for optimized returns.
As Aave continues to innovate, users are encouraged to share their experiences and strategies with the community. Staying updated on the latest developments is crucial for those looking to maximize their DeFi engagements.
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