Auto-compounding your stkAave with Paladin

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Romain Figuereo

Founding Knight

Post Date February 16, 2022

Today we’re excited to bring a sustainable yield opportunity to the Aave ecosystem.

Paladin has always been about creating positive feedback loops with DeFi governance systems and their underlying tokenomics. We first started with vote lending in order to unlock the value of governance tokens. Since then, the value of passive strategies which auto-compound has proved to be one of the most attractive properties for users who do not care about participating in governance.

Case in point, our stkAave pool has been growing consistently for the past few months and is now the 20th biggest holder of said token.

Paladin Lending Dune Dashboard by jjnnbbtt

More than vote lending, the auto “claim & compound” feature of this pool allowed it to become a wrapper for StkAave.

Before palStkAave, if you deposited stkAave into a contract that didn’t claim the Safety Module yield, you wouldn’t have accrued any rewards during the whole deposit period.

For example, if you are providing liquidity on Uniswap v3 for the Aave / StkAave pair (to bypass the cooldown of the Safety Module), you would effectively not benefit from the aforementioned yield.

Now, if you replace stkAave with our Paladin wrapper, you can benefit from the LP fees + the Safety Module rewards.

We made this position easy to set up by seeding a palStkAAVE / AAVE pool on Curve, live here.

This pool allows you to exit quickly from stkAave via the wrapper, which should have deeper liquidity as it will be more lucrative.

As per the latest Liquidity Mining Adjustments, we will create a gauge and incentivize the pool at a rate of 20,000 PAL / month for now.

Eventually if the pool keeps on growing in a healthy manner, it will be able to request CRV mining for the gauge.

All in all this strategy currently offers four layers of yield, with no IL risk and no leverage.

Paladin will also shortly announce another partnership reinforcing this yield strategy, as a vault directly in $AAVE which will potentially offer six layers of yield.

We’ll continue to synergize with projects we build with and are proud to expand the realm of possibilities for Aave holders.

Happy farming pals

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