What is Aave? | The Future of Crypto Lending

Speaker 1: 0:00

You're listening to the sugar cane podcast, where you get all of crypto's tastiest tips. Here's your host, sheldon Trotman and Rudy Dogum.

Speaker 2: 0:11

Sheldon. What is Aave?

Speaker 1: 0:13

Hey, yes, so Aave is a lending product, right? So, like kind of a bit of context is that if you, let's say, you have USDC like $5 in USDC and you want to get some return on that USDC, if you're currently on blockchains, one way you can do is using the product like Aave, where you essentially send it to a smart contract and a smart contract has some code in there where, like, people can actually borrow that money and use that for something. But it's kind of I'll dive into more details about how that how you can make sure it's safe but when they borrow it, they pay some return back to the smart contract and smart contract pays you for being the one to provide that money to be lent out.

Speaker 2: 0:52

So when a user is using SureKain and they want to interact with Aave, they are pretty much providing liquidity to this smart contract to then lend out to other users and then collect rewards from that loan. Yep.

Speaker 1: 1:09

Yep, so like you can actually be able to not have to find a person who wants to borrow money from you, especially just lending it to a pool. Even the pools was used from on the other side for someone to borrow against and borrow and use it for whatever they want to use it for.

Speaker 2: 1:23

Gotcha. And are those pools all on the Ethereum chain or are they multiple chains? How do you decide for that? No Aave is multi-chain.

Speaker 1: 1:31

So, like they have an instance on, let's say, arbitrum that we talked about in a week, a couple of weeks ago. They have Polygon, they have Optimism, they have Ethereum, and so there are a number of different places where Aave protocol is deployed to and, technically, actually, the rates on these different chains can actually vary. So, for example, like, let's say you can get, let's say, 2.5% on, let's say, ethereum, let's say on Arbitrum, because it's a hot lending protocol and that's where a lot of the money is. Let's say the yields there are a little bit higher. Let's say it's 3%, right, and in that scenario, you're better off actually lending on Arbitrum versus lending on Ethereum. So, like, the rates of where the actual yields are the best can vary depending on what chain you're on Based on, like the pools, based on, like the activity. A lot of things get into play when it comes to like varying the values.

Speaker 2: 2:19

Nice, and then sure, there's always looking out for their users, so they always make it easy and they find the best rates for them. Yeah.

Speaker 1: 2:27

So we have a couple of like ML models that actually scrape all the data on chain and do some like analysis of like in the past what is the best rate as it's changed over time, because actually technically the actual rates change every block.

Speaker 1: 2:40

So like every block that's pushed, the rate that a person can get can change, and it can change directionally upwards, directionally downwards, depending on, again, every block. But, like, from our perspective, we're actually able to then really find out and do an average over time what the best rates are. So you get this move out and can get the best rates from wherever you are.

Speaker 2: 3:01

This is a complicated matter because you're using LLM and to like language learning models to figure out the best rates and also incorporate with the blockchain and then build on top of Aave. So how was your experience building this out and building with Aave?

Speaker 1: 3:15

So one technical nuance we actually don't use LLM because like the LLM structure is a bit different than what we use. We do use machine learning models, which is a slightly different version of the LLM. Yeah, it was pretty interesting because the machine learning side of it we could dive down that in another podcast. But like it's pretty complex to be able to pull on chain data and then have to understand anything across everywhere all at once like the funny movie. But from our perspective integrating Aave specifically was pretty seamless just because we're swapping, we're transferring, doing that stuff existing in our existing products. So like just an additional, like feature integration point.

Speaker 2: 3:57

Nice and was the. I guess the experience of building with Aave simple in itself too.

Speaker 1: 4:06

Yeah, yeah, like also, aave is doctor. They've been around for a while. They've been really good at like providing information to the ecosystem about how to actually integrate them. They're both like lending and borrowing side of it is really well documented, so you actually know how to calculate the rates that you get. It's like we actually have been pretty, pretty easy to actually integrate Aave as a product.

Speaker 2: 4:27

Nice, so docs for everything. Thank you, thank you, aave, for that. The developers. Thank you, If any developers are building with Aave, let us know. And if yeah, again, if you need an intro or something with Aave, reach out to us and we'll be happy to help.