Earn with Aave
Vault’s Earn experience is built on Aave — a decentralised lending protocol where you supply assets to earn interest or borrow against collateral. This guide covers supply, borrow, and the risks to understand first.
Aave in Vault
Aave pools liquidity on each supported network. When you supply, your assets join the pool and borrowers pay interest that flows back to suppliers. When you borrow, you take assets from the pool and post collateral elsewhere in your position — you pay borrow interest until you repay.
Vault embeds Aave on the Earn page: browse markets by chain and asset, open a reserve to supply, withdraw, borrow, or repay, and review live supply/borrow APYs and your positions — all from your self-custody wallet.
Supply (lend)
Supplying means depositing an asset into an Aave market. You earn interest from borrowers who use that liquidity. In return you receive aTokens (for example aUSDC) that represent your deposit and grow in balance as interest accrues — there is nothing separate to claim.
Supplied assets can optionally be enabled as collateral, which lets you borrow other assets against them. Collateral you do not need for borrowing can stay supplied for yield only.
How to supply in Vault
Open Earn and pick a market
Go to Earn, choose a network, then select the asset you want to supply. Each market shows supply APY, borrow APY, and total market size.
Supply your asset
On the asset page, open the Supply action, enter an amount, and sign the transaction. Vault may prompt for a token approval first if needed.
Track your aToken balance
Your aToken balance increases over time as interest accrues. Charts on the asset page show supply APY history and how your position has grown.
Withdraw when you want
Use Withdraw to redeem aTokens for the underlying asset plus earned interest, as long as the pool has enough free liquidity (see liquidity risk below).
Borrow
Borrowing lets you take assets from Aave while keeping collateral supplied in your position. You pay a variable borrow APR until you repay. This is useful for liquidity without selling collateral, but it introduces liquidation risk if your health factor falls too low.
You can only borrow up to the limit allowed by your collateral and the market’s loan-to-value rules. Vault shows how much you can borrow and previews health factor before you confirm.
How to borrow in Vault
Supply collateral first
Borrowing requires supplied collateral enabled for borrowing. Supply assets on Earn, then ensure they are marked as collateral in your position.
Open Borrow on the asset
Choose the asset you want to borrow, switch to Borrow, enter an amount within your borrow limit, and review the health factor preview.
Sign and receive borrowed assets
After you sign, borrowed tokens appear in your wallet. Interest accrues on your debt over time at the market's variable borrow rate.
Repay to reduce debt
Use Repay on the borrowed asset to pay down debt (plus accrued interest). You can repay partially or in full, then withdraw collateral once your health factor allows.
Collateral & health factor
Your health factor measures how safe your borrow position is. It compares the value of your collateral to your debt. A higher health factor means more buffer before liquidation; as collateral prices fall or debt grows, the health factor drops.
Before supply, withdraw, borrow, or repay, Vault previews how the action will change your health factor. If a borrow would put you at risk (health factor too low), the UI warns you before you sign.
Understanding the risks
Aave is a major audited protocol, but DeFi lending is not bank savings. There is no deposit insurance and returns are not guaranteed. Understand these risks before supplying or borrowing.
Smart contract risk
Funds interact with Aave smart contracts on-chain. Audits reduce but do not eliminate the chance of bugs or exploits affecting pooled assets.
Liquidation risk (borrowing)
If collateral value drops or borrow interest grows, your health factor can fall until Aave liquidates collateral to cover debt. You may lose part of your collateral beyond the interest you paid.
Liquidity risk (supply)
Withdrawals depend on unused liquidity in the pool. If utilisation is very high, you may need to wait until borrowers repay or rates rise enough to free liquidity. High utilisation also tends to increase supply APY.
Variable rates
Supply and borrow APYs change with market conditions. A favourable rate today may be lower (for supply) or higher (for borrow) tomorrow.
Market and price risk
Earning supply APY does not shield you from the underlying token losing value. Borrowing adds exposure: debt is denominated in borrowed assets while collateral may move differently.
Protocol governance risk
Aave governance can change supported assets, risk parameters, and rate models. Updates can affect existing positions after you deposit or borrow.