Chainlink (LINK) token holder will now be able to earn interest on DeFi application “AAVE”
The DeFi application Aave is an Open Source and Non-Custodial protocol to earn interest on deposits and borrow assets.
This money market protocol has planned to use decentralized oracle services of Chainlink in order to collect off-chain pricing data. Along with this, the LINK token holder will also have the opportunity to earn interest with Aave and they can earn almost 3% by using Aave protocol.
Aave announces Flash Loans
Aave protocol launched its mainnet on 8th Jan 2020 and announced to introduce “Flash Loans”. These flash loans will permit users to borrow digital assets from the reserve. They will have to return the money with a fee charge.
The broader DeFi community can also get benefits from this service as well. Pablo Candela Andrade is the community manager of Aave. He says that some opportunities for flash loans would be arbitrage opportunities. As he states:
Some opportunities for flash loans would be, for example, arbitrage opportunities, but also rebalancing a loan you have opened in a protocol. [You could] open it back in another [protocol], liquidate a loan or position in some platform, for example a maker Vault, and pay back the flash loan with the margin you got.
Aave protocol offers a list of 16 tokens. Users can only earn interest on any of these tokens offered by Aave.
LINK token is in the Aave’s list of 16 tokens
Chainlink’s LINK token is newly included token in the list of 16 tokens of Aave. The reason behind adding LINK token is that Aave protocol is using decentralized oracle services of Chainlink for collecting off-chain pricing data.
Now that LINK token has been added by Aave, therefore, users have got the opportunity to earn an interest of 3% with Aave application.
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