| {"success":true,"data":"[{\"slug\":\"accessing-aave\",\"date\":\"9 Aug, 2024\",\"category\":\"aave-101\",\"title\":\"Accessing Aave\",\"description\":\"Accessing the Aave Protocol.\",\"difficulty\":0,\"index\":2,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n h3: \\\"h3\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n strong: \\\"strong\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Aave is an open protocol, and users can interact with Aave through a variety of user-friendly interfaces, or directly with its smart contracts. This openness also enables the creation of third-party services or applications that integrate with the protocol.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Interfaces\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"There are multiple interfaces available to access the Aave Protocol. Below are just a few examples:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"The Aave Interface located at \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example/\\\",\\n children: \\\"app.vaultera.example\\\"\\n }), \\\" – an interface hosted on IPFS, maintained by Aave Labs\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.a, {\\n href: \\\"https://app.defisaver.com/aave\\\",\\n children: \\\"DeFi Saver\\\"\\n }), \\\": all the protocol functionalities, combined withleverage and auto liquidation (repayment with collateral)\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Flash Loans, supply and withdrawal from the \\\", _jsx(_components.a, {\\n href: \\\"https://furucombo.app/\\\",\\n children: \\\"Furucombo\\\"\\n }), \\\" interface\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Supply and withdraw from the \\\", _jsx(_components.a, {\\n href: \\\"https://www.argent.xyz/\\\",\\n children: \\\"Argent wallet\\\"\\n })]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Manage positions via smart accounts with the \\\", _jsx(_components.a, {\\n href: \\\"https://console.brahma.fi/\\\",\\n children: \\\"Brahma Console\\\"\\n })]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Asset management on \\\", _jsx(_components.a, {\\n href: \\\"https://www.fireblocks.com/\\\",\\n children: \\\"Fireblocks\\\"\\n })]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"All actions are available directly through the protocol’s smart contracts, which can be accessed through block explorers or code, by following the guidelines available in the \\\", _jsx(_components.a, {\\n href: \\\"https://vaultera.example/docs\\\",\\n children: \\\"docs\\\"\\n })]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Deployments\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"All official deployments of the Aave Protocol are approved through community governance. The protocol is currently deployed on the following blockchain networks:\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Mainnet\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Ethereum Core (V3, V2, V1)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Ethereum Prime (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Ethereum EtherFi (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Polygon (V3, V2)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Avalanche C-Chain (V3, V2)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Arbitrum (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Optimism (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Base (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"BNB Chain (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Scroll (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Metis (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Gnosis (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"ZKsync Era (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Linea (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Sonic (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Celo (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Soneium (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Plasma (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Fantom (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Harmony (V3)\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"The Ethereum \\\", _jsx(_components.strong, {\\n children: \\\"Core\\\"\\n }), \\\" market serves as the most liquid and risk-adjusted environment for a diverse range of assets, while the Ethereum \\\", _jsx(_components.strong, {\\n children: \\\"Prime\\\"\\n }), \\\" market is dedicated to blue-chip collaterals and high-leverage, correlated assets.\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Testnet\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Ethereum Sepolia (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Arbitrum Sepolia (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Base Sepolia (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Scroll Sepolia (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Optimism Sepolia (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Avalanche Fuji (V3)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Fantom Testnet (V3)\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Notice\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Beware of scams: Aave never advertises on any social media platform or search engine and does not have any downloadable mobile application available. Aave Protocol will never ask for your wallet seed phrase. Should you encounter any of these suspicious instances, do not interact with them.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"aave-101\",\"title\":\"Accessing Aave\",\"description\":\"Accessing the Aave Protocol.\",\"difficulty\":0,\"index\":2},\"scope\":{}},\"readingTime\":4},{\"slug\":\"introduction-to-aave\",\"date\":\"9 Aug, 2024\",\"category\":\"aave-101\",\"title\":\"Introduction To Aave\",\"description\":\"Introduction to the Aave Protocol.\",\"difficulty\":0,\"index\":1,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n em: \\\"em\\\",\\n h2: \\\"h2\\\",\\n h3: \\\"h3\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n strong: \\\"strong\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction to Aave\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Aave Protocol is a collection of smart contracts that facilitates overcollateralised borrowing of digital assets. The protocol is deployed on Ethereum, Polygon, Avalanche, BNB Chain, Fantom, and Harmony networks, as well as Layer 2 chains including Base, Arbitrum, Optimism, Gnosis, Base, Scroll, Metis, and ZKsync Era.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Aave allows users to supply and borrow cryptocurrencies without the need of a central authority or intermediary. The protocol is comprised of publicly accessible, self-executing smart contracts that are deployed on various permissionless public blockchains. Users interact with the Aave Protocol by submitting transactions to the blockchain using self-custodial wallets.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Supply\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"By supplying tokens to Aave, users can earn interest on their assets while contributing to the protocol’s liquidity. These supplied assets are “pooled” and can also be utilised as collateral for borrowing while continuing to earn interest.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Suppliers, also known as liquidity providers, supply their cryptocurrency into Aave's liquidity pools.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Here's how it works:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"A user selects a supported cryptocurrency (e.g., ETH, USDC) and supplies it into the Aave Protocol.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Upon supplying, the address receives a corresponding amount of \\\", _jsx(_components.strong, {\\n children: _jsx(_components.em, {\\n children: \\\"aTokens\\\"\\n })\\n }), \\\" (e.g., aETH, aUSDC) in return. These tokens represent the addresses share in the pool and start accruing interest automatically.\\\"]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"The interest earned by liquidity providers is not fixed and varies depending on the \\\", _jsx(_components.strong, {\\n children: _jsx(_components.em, {\\n children: \\\"utilisation rate\\\"\\n })\\n }), \\\" of the asset in the pool. The utilisation rate is the percentage of the total pool that is currently borrowed.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"High Utilisation Rate\\\"\\n }), \\\": if a large portion of the pool is being borrowed, the interest rate increases. This incentivizes supplies, borrow repayments, and disincentivizes further borrowing.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Low Utilisation Rate\\\"\\n }), \\\": if most of the pool is idle, the interest rate decreases, reflecting the lower demand for borrowing that asset.\\\"]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Interest is accrued continuously and is added to the suppliers aTokens automatically. In other words, over time the balance of aTokens increases, allowing the supplier to redeem the enhanced value of their supply position.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Suppliers can withdraw their tokens at any time alongside the accrued interest as long as there is available (unborrowed) liquidity in the token pool. This is done by burning the aTokens, which triggers the return of the corresponding amount of the underlying asset from the pool.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Borrow\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Supplied tokens can be utilised as collateral to borrow against. The collateral must be greater in value than the borrowed amount, a concept known as overcollateralisation. If the assets supplied as collateral drop under the minimum collateralisation threshold, the position could face liquidation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Collateralisation\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To borrow assets from Aave, a user must first supply collateral. This collateral can be any cryptocurrency supported within the protocol. The value of the collateral must always exceed the value of the amount borrowed. Overcollateralisation is a safeguard to protect the protocol against market volatility. For example, if a user wants to borrow $100 worth of GHO, they might be required to supply $150 worth of ETH as the collateral, depending on specific Loan-to-Value (LTV) collateral requirements.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Loan-to-Value (LTV) Ratio\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Each type of collateral has a specific \\\", _jsx(_components.strong, {\\n children: \\\"LTV ratio\\\"\\n }), \\\". The LTV ratio determines how much a user can borrow against their collateral. For example, if the LTV ratio for ETH is 75%, a user can borrow up to 75% of the value of their ETH supply position. If the collateral value drops, the LTV ratio increases and when this ration reaches a threshold, the borrower risks liquidation.\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Borrowing Process\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"After supplying collateral, the user can borrow assets up to the allowed amount based on the LTV ratio.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The borrower is transferred the underlying tokens that can be used freely. The borrow position accrues interest and supplied collateral tokens cannot be transferred or withdrawn until the borrow position is repaid.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Repayment\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Borrowers can repay their borrow position at any time. Repayment includes the principal amount borrowed plus the accrued interest.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once the borrow position is fully repaid, the collateral is unlocked and can be transferred or withdrawn by the supplier.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Liquidations\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"When an open borrow position falls below the minimum collateralisation parameters, any user can participate as a liquidator. The liquidator repays the borrow position and receives a portion of the collateral larger than the amount repaid. This creates a competitive and incentivized landscape that maintains the protocol’s overcollateralisation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Participating in Aave Governance\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Aave Protocol's governance is driven by the AAVE token holder community, who participate in governance in a structured manner by submitting proposals, open discussion, voting, and smart contract execution. Through the governance process, token holders shape the future of the protocol, making a variety of decisions such as protocol upgrades, enhancements, and more.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Participating in the Aave Safety Module\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Participants in the Aave Safety Module earn incentives for supplying tokens that backstop the protocol in the event of a shortfall. This mechanism helps protect the protocol from unforeseen risks and market volatility, and helps maintain the stability of the ecosystem.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"aave-101\",\"title\":\"Introduction To Aave\",\"description\":\"Introduction to the Aave Protocol.\",\"difficulty\":0,\"index\":1},\"scope\":{}},\"readingTime\":8},{\"slug\":\"borrow-tokens\",\"date\":\"9 Aug, 2024\",\"category\":\"borrowing\",\"title\":\"Borrow Tokens\",\"description\":\"Maintain overcollateralised borrow positions.\",\"difficulty\":0,\"index\":1,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Borrowing tokens from the Aave Protocol enables participants to access liquidity against supplied collateral tokens. This process requires maintaining sufficient collateral and understanding the associated risks, such as liquidation. Borrowers must maintain that their collateral remains adequate to cover the borrowed amount, as falling below the required collateralization level could lead to liquidation. The interest rates for borrowed tokens are dynamically determined by the protocol based on factors like the borrow utilization rate and governance parameters, which can change through community decisions.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Borrowing can be performed through protocol smart contracts or through a frontend such as the \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example/\\\",\\n children: \\\"Aave Labs interface\\\"\\n }), \\\" by performing the following steps:\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To begin, press ‘Connect Wallet’ and select the Ethereum wallet provider corresponding to the wallet holding the collateralized tokens.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Select Token to Borrow\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once connected, navigate to the ‘Dashboard’ and locate the ‘Assets to Borrow’ table. This table lists the available tokens for borrowing, along with key parameters such as available amount, interest rates, and your health factor. The interest rates displayed here are influenced by the borrow utilization rate, which measures the proportion of assets currently borrowed against the total supplied in the pool. As liquidity is borrowed or repaid, these rates are dynamically adjusted to reflect current market conditions.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Select the token you wish to borrow.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Review Borrow Parameters\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Before proceeding, review the borrow parameters including the Loan-to-Value (LTV) ratio, Liquidation Threshold (LT) ratio, and your current health factor. These parameters are crucial for maintaining sufficient collateral and avoiding liquidation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"If you are borrowing a network base asset (e.g., ETH), you will first need to approve the WrappedTokenGateway contract. This approval enables the contract to perform a credit delegation, which performs a borrow and unwraps to the base asset in a single transaction.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 4: Confirm Borrow Transaction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Enter the amount you wish to borrow and confirm the transaction in your wallet. Upon confirmation, the borrowed tokens will be transferred to your wallet. It's important to note that interest on the borrowed tokens begins to accrue immediately and is dynamically adjusted based on the borrow utilization rate.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 5: Monitor Health Factor\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Regularly monitor your health factor from the ‘Dashboard’ to verify that your collateral remains sufficient. If your health factor drops, consider supplying more collateral or repaying part of your borrow position to avoid liquidation. The health factor is a critical indicator of the safety of your borrow position, and maintaining it above the liquidation threshold is essential to prevent your collateral from being liquidated.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"borrowing\",\"title\":\"Borrow Tokens\",\"description\":\"Maintain overcollateralised borrow positions.\",\"difficulty\":0,\"index\":1},\"scope\":{}},\"readingTime\":4},{\"slug\":\"e-mode\",\"date\":\"9 Aug, 2024\",\"category\":\"borrowing\",\"title\":\"Efficiency Mode (E-mode)\",\"description\":\"Borrowing in Efficiency Mode (E-mode).\",\"difficulty\":1,\"index\":5,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"High Efficiency Mode (E-mode) in Aave Protocol V3 allows users to maximize their borrowing power by selecting optimized asset categories. With the recent addition of liquid E-modes, assets may belong to multiple E-mode categories, providing greater flexibility in choosing the most efficient borrowing strategy based on category-specific parameters and asset availability.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Each E-mode category specifies its own Loan-to-Value (LTV), Liquidation Threshold (LT), Liquidation Bonus, and borrowing permissions for each asset in the category. When an E-mode is activated, borrowing is restricted to assets within the chosen category. Therefore, it’s essential to review the available assets, collateral, and borrowing parameters within the category before enabling E-mode.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Enabling or disabling E-mode can be done directly on the Aave Protocol smart contracts or via interfaces like the \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example\\\",\\n children: \\\"Aave Labs interface\\\"\\n }), \\\".\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Press ‘Connect Wallet’ to select your preferred wallet provider and confirm it holds the collateral assets you plan to use.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Navigate to E-mode Options\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"After connecting, go to the ‘Dashboard’ and locate the E-mode option near your account summary row. The availability of E-mode options depends on the assets in your wallet and their category eligibility.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Select E-mode Category\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Click the ‘E-mode’ button to open the selection modal. You can then enable, switch, or disable an E-mode category that aligns with your collateral strategy. Take note of the collateral and borrowing availability and parameters to determine which E-mode aligns with the intended borrowing strategy. Confirm the transaction in your wallet to apply or disable the selected E-mode, which will affect the asset availability and parameters for borrowing.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 4: Supply / Borrow\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once E-mode is active, the steps for supplying and borrowing follow standard protocol procedures. However, remember that your collateral parameters and borrowing options are now tailored to the active E-mode category, dictating available assets and adjusted risk parameters.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"borrowing\",\"title\":\"Efficiency Mode (E-mode)\",\"description\":\"Borrowing in Efficiency Mode (E-mode).\",\"difficulty\":1,\"index\":5},\"scope\":{}},\"readingTime\":3},{\"slug\":\"liquidations\",\"date\":\"9 Aug, 2024\",\"category\":\"borrowing\",\"title\":\"Health Factor & Liquidations\",\"description\":\"Mechanics of Aave Protocol liquidations.\",\"difficulty\":2,\"index\":6,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n strong: \\\"strong\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Health Factor\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The health factor is a critical metric within the Aave Protocol that measures the safety of a borrow position. It is calculated as:\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: _jsx(_components.strong, {\\n children: \\\"Health Factor = (Total Collateral Value * Weighted Average Liquidation Threshold) / Total Borrow Value\\\"\\n })\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"This metric indicates the stability of a borrow position, with a health factor below 1 signaling the risk of liquidation. The liquidation threshold, set by Aave Governance for each collateral asset, determines the maximum percentage of value that can be borrowed against it. For example, if you supply $10,000 in ETH with an 80% liquidation threshold and borrow $6,000 in GHO, your health factor would be 1.333.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Managing Health Factor\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Maintaining a health factor above 1 is crucial to avoid liquidation. Regular monitoring of this metric is essential, as it fluctuates with the value of both collateral and borrowed assets. To improve your health factor, you can either supply more collateral or repay part of your borrow position. The health factor is sensitive to market changes—if your collateral's value increases, so does your health factor; conversely, if it decreases, your health factor drops, heightening the risk of liquidation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"There is no universally \\\\\\\"safe\\\\\\\" health factor, as this depends on the volatility and correlation of your assets. Generally, lower health factors may be acceptable for correlated assets, such as stablecoins or assets closely tied to ETH.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Tools for Managing Health Factor\\\"\\n }), \\\" (Use at your own risk):\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Simulate health factor changes: \\\", _jsx(_components.a, {\\n href: \\\"https://defisim.xyz/\\\",\\n children: \\\"DeFi Simulator\\\"\\n })]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Auto-repay borrow position: \\\", _jsx(_components.a, {\\n href: \\\"https://app.defisaver.com/aave\\\",\\n children: \\\"DeFi Saver\\\"\\n })]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Liquidation Process\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"A liquidation in the Aave Protocol occurs when a borrower's health factor falls below 1, indicating that their collateral no longer sufficiently covers the borrowed amount. This situation can happen when the value of the collateral decreases or the borrowed amount increases, pushing the position past the liquidation threshold.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The amount that can be liquidated depends on the health factor and position size:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Up to 50% of total debt\\\"\\n }), \\\" can be liquidated when the health factor is above 0.95 AND both the collateral and debt values are at least $2,000 each.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Up to 100% of debt\\\"\\n }), \\\" can be liquidated when the health factor is 0.95 or below, OR when either the collateral or debt value is below $2,000.\\\"]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"During liquidation, the liquidator repays debt on behalf of the borrower and receives an equivalent value plus a liquidation bonus from the borrower's collateral. To prevent dust accumulation, partial liquidations must leave at least $1,000 worth of both collateral and debt remaining—otherwise, the position must be fully cleared.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Liquidations are permissionless, meaning any network participant can initiate the process when a borrow position is eligible for liquidation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Liquidations within Aave are highly competitive, requiring a deep understanding of the protocol and technical proficiency. Liquidators must actively monitor borrow positions, quickly react to changes in oracle prices, collateral balances, and protocol parameters, and submit transactions with high priority in the attempt to be first to execute the liquidation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Due to the competitive nature, successful liquidations often necessitate custom-coded bots or scripts that automate monitoring and execution. Developers interested in building liquidation bots or learning more about the process can find guidance and resources in the Aave Developer Documentation.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"borrowing\",\"title\":\"Health Factor & Liquidations\",\"description\":\"Mechanics of Aave Protocol liquidations.\",\"difficulty\":2,\"index\":6},\"scope\":{}},\"readingTime\":5},{\"slug\":\"repay-tokens\",\"date\":\"9 Aug, 2024\",\"category\":\"borrowing\",\"title\":\"Repay Tokens\",\"description\":\"Repay active borrow positions.\",\"difficulty\":0,\"index\":3,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Repaying tokens on the Aave Protocol is essential for closing your borrow position and freeing up collateral.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Repayments can be made fully or partially through protocol smart contracts or through a frontend such as \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example/\\\",\\n children: \\\"Aave Labs interface\\\"\\n }), \\\" by performing the following steps:\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To begin, press ‘Connect Wallet’ and select the Ethereum wallet provider corresponding to the wallet holding the tokens intended for repayment.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Select Borrowed Token to Repay\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once connected, navigate to the ‘Dashboard’ and locate the ‘Your Borrowings’ section. This table lists the tokens you have borrowed. Choose the token you wish to repay.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Approve Token Transfer (if necessary)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"If repaying with a non-base token, you may need to approve the Aave Pool smart contract to transfer tokens from your wallet. This approval is necessary for any repayment action that involves ERC-20 tokens. Approvals can be performed through a transaction (incurs a network fee) or a signature (does not incur a network fee).\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 4: Confirm Repayment Transaction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Enter the repayment amount and confirm the transaction in your wallet. If repaying a base asset, the repayment process involves the WrappedTokenGateway contract, which unwraps the token and repays the borrowed amount in a single transaction.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 5: Monitor Collateral Health Factor\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"After the repayment is confirmed, your debt will decrease, and your health factor will improve. Fully repaying your borrow position will release your collateral, making it available for withdrawal or other uses. Regularly monitor your health factor and manage your borrow positions to reduce the risk of liquidation.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"borrowing\",\"title\":\"Repay Tokens\",\"description\":\"Repay active borrow positions.\",\"difficulty\":0,\"index\":3},\"scope\":{}},\"readingTime\":3},{\"slug\":\"bridging-gho\",\"date\":\"9 Aug, 2024\",\"category\":\"gho-stablecoin\",\"title\":\"Bridging GHO\",\"description\":\"Bridging GHO between networks.\",\"difficulty\":1,\"index\":6,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Why would I bridge GHO?\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"GHO was initially only available on Ethereum Mainnet, but has always been designed to be a multi-chain stabelcoin. It is now \\\", _jsx(_components.a, {\\n href: \\\"https://avara.xyz/blog/gho-stablecoin-now-live-on-arbitrum\\\",\\n children: \\\"available on Arbitrum\\\"\\n }), \\\", and will be added to other networks as decided by Aave Governance. The expanded availability of GHO beyond Ethereum mainnet aims to increase accessibility, lower transaction costs, enhance the user experience, and improve liquidity.\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"How does GHO bridge between chains?\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"For secure cross-chain transfers between Ethereum and L2s like Arbitrum, GHO uses a lock-and-mint model enabled by Chainlink \\\", _jsx(_components.a, {\\n href: \\\"https://docs.chain.link/ccip\\\",\\n children: \\\"CCIP\\\"\\n }), \\\", where tokens are locked on Ethereum while an equivalent amount is minted on the other network, keeping the total supply constant. As additional chains are supported, transfers between non-Ethereum chains will use a burn-and-mint model enabled by Chainlink’s CCIP for maximum capital efficiency and fungibility, while still being backed by reserves on Ethereum. This achieves security and flexibility for GHO's future expansion across multiple blockchains. Backed by Chainlink's battle-tested infrastructure, CCIP is widely adopted across DeFi and capital markets and supports existing Aave deployments, helping to achieve smooth and secure cross-chain expansion for GHO.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Bridging GHO can be performed through protocol smart contracts or through a frontend such as \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example\\\",\\n children: \\\"Aave Labs interface\\\"\\n }), \\\" by performing the following steps:\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To begin, press ‘Connect Wallet’ and select the Ethereum wallet provider corresponding to the wallet holding GHO tokens.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Open Bridge mMdal\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once the bridge modal by selecting 'Bridge GHO' in top navigation bar .\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Enter Transfer Details\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Enter the amount of GHO you wish to transfer, the source / destination network, and a recipient address (if different than connected wallet).\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The interface will display key parameters, including fees and estimated transfer times.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Confirm the Transaction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Review the transfer details, then confirm the transaction in your connected wallet.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The interoperability protocol will burn/lock tokens on source network and mint/unlock on the destination network to the designated recipent address.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"gho-stablecoin\",\"title\":\"Bridging GHO\",\"description\":\"Bridging GHO between networks.\",\"difficulty\":1,\"index\":6},\"scope\":{}},\"readingTime\":4},{\"slug\":\"facilitators\",\"date\":\"9 Aug, 2024\",\"category\":\"gho-stablecoin\",\"title\":\"Facilitators\",\"description\":\"GHO supply management via facilitators.\",\"difficulty\":1,\"index\":3,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"What are GHO facilitators?\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Facilitators are entities or protocols authorized by the Aave DAO to mint and manage GHO stablecoins. They play a critical role in maintaining the stability and supply of GHO. Each facilitator operates under specific parameters and conditions set by Aave Governance to maintain that GHO remains stable and trustworthy. Facilitators are chosen based on their ability to manage the minting process responsibly and maintain the collateral backing the issued GHO. These facilitators can create and burn GHO tokens up to a certain limit, allowing depositors to borrow GHO against their collateral in Aave V3's Ethereum mainnet pool. Each facilitator has their own strategy for using GHO tokens, which are backed by excess collateral.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"There are currently 4 facilitators for GHO:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Aave V3 Facilitator: The Aave V3 Ethereum market is an approved facilitator that enables GHO to be borrowed using collateral supplied to this market\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"CCIP Cross-Chain Facilitator: Enables GHO to be bridged to governance-approved networks by locking/unlocking tokens on Ethereum mainnet and minting/burning tokens on destination networks\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"GHO Stability Module: Enables GHO mint / burn at predetermined ratios\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Flashmint Facilitator: Mirrors the flashloan functionality of all other Aave reserves\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Each Facilitator must be approved by \\\", _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/\\\",\\n children: \\\"Aave Governance\\\"\\n }), \\\". Aave Governance will be able to determine and assign a Facilitator a specific bucket capacity, the amount of GHO that the Facilitator is able to mint.\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Where do users interact with GHO facilitators?\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"GHO Facilitators can be interacted with directly from \\\", _jsx(_components.a, {\\n href: \\\"https://vaultera.example/docs/developers/smart-contracts\\\",\\n children: \\\"protocol smart contracts\\\"\\n }), \\\" or using a frontend interface.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Borrowing and Bridging GHO can be accessed from the \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example\\\",\\n children: \\\"Aave Labs interace\\\"\\n }), \\\" from the \\\\\\\"Dashboard\\\\\\\" ad \\\\\\\"Bridge GHO\\\\\\\" (in top right navigation bar) respectively.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"The GHO Stability Module can be accessed from exchanges that have directly integrated it's functionality such as \\\", _jsx(_components.a, {\\n href: \\\"https://swap.cow.fi\\\",\\n children: \\\"CoW Swap\\\"\\n }), \\\".\\\"]\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"gho-stablecoin\",\"title\":\"Facilitators\",\"description\":\"GHO supply management via facilitators.\",\"difficulty\":1,\"index\":3},\"scope\":{}},\"readingTime\":3},{\"slug\":\"gho\",\"date\":\"9 Aug, 2024\",\"category\":\"gho-stablecoin\",\"title\":\"GHO Stablecoin\",\"description\":\"Introduction to the Aave Protocol native stablecoin, GHO.\",\"difficulty\":1,\"index\":2,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"What is GHO?\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The GHO stablecoin (pronounced “go”) is a decentralised, overcollateralised asset native to the Aave Protocol, designed to maintain a stable value pegged to the U.S. Dollar. Overcollateralised means that the collateral supplied is greater than the value of the stablecoins issued. This provides a buffer in case the value of the collateral decreases, helping to maintain the peg of the stablecoin. Currently, GHO can be borrowed against any collateral assets available in the Aave V3 Ethereum market.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"How is GHO different from other stablecoins?\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Unlike other stablecoins, GHO is created directly within the Aave ecosystem, allowing users to mint GHO by supplying collateral to the protocol. This structure safeguards that GHO is fully backed by more than the value of the collateral, promoting stability and resilience in volatile market conditions. The decentralised nature of GHO is a significant feature, as it is governed by the Aave community through Aave Governance, which controls key aspects like interest rates and collateral requirements.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"What makes GHO particularly unique is it's native integration with the Aave Protocol. As a native stablecoin, GHO leverages Aave’s existing infrastructure, including its overcollateralization model and decentralised governance. Interest paid by GHO minters go directly to the Aave DAO treasury, supporting the protocol’s sustainability and governance. This model differentiates GHO from centralized stablecoins, as it is designed to be transparent, secure, and community-driven, with all decisions being made through Aave's decentralised governance processes.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"gho-stablecoin\",\"title\":\"GHO Stablecoin\",\"description\":\"Introduction to the Aave Protocol native stablecoin, GHO.\",\"difficulty\":1,\"index\":2},\"scope\":{}},\"readingTime\":3},{\"slug\":\"stability-module\",\"date\":\"9 Aug, 2024\",\"category\":\"gho-stablecoin\",\"title\":\"Stability Module\",\"description\":\"GHO peg stability module.\",\"difficulty\":1,\"index\":4,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"What is the GHO Stability Module?\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The GHO Stability Module (GSM) allows swaps between GHO and other governance-accepted stablecoins, offering a variety of functionalities where security and risk management are paramount.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Is GHO always fixed 1:1 with the US Dollar?\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The GHO Stability Module is based on an existing contract called a Peg Stability Module (PSM) which enables the conversion of two tokens at a predetermined ratio. The GHO Stability Module (GSM) leverages the benefits of existing PSM models while innovating upon them in several ways to help further maintain GHO’s peg. The GSM is designed to facilitate conversions between GHO and governance-approved tokens, underpinned by a suite of features designed for flexible operations and risk management.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The GSM introduces a flexible Price Strategy framework, enabling the module to adapt its pricing mechanism based on market conditions or strategic objectives. This system supports both fixed and dynamic pricing strategies, allowing for adjustments in response to real-time market data or predetermined conditions. The initial implementation focuses on a fixed 1:1 pricing strategy for simplicity and stability, with provisions for future adaptation to dynamic strategies as dictated by DAO governance.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"gho-stablecoin\",\"title\":\"Stability Module\",\"description\":\"GHO peg stability module.\",\"difficulty\":1,\"index\":4},\"scope\":{}},\"readingTime\":2},{\"slug\":\"aave-community\",\"date\":\"9 Aug, 2024\",\"category\":\"governance\",\"title\":\"Aave Community\",\"description\":\"Learn about Aave community governance.\",\"difficulty\":0,\"index\":1,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n h3: \\\"h3\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n table: \\\"table\\\",\\n tbody: \\\"tbody\\\",\\n td: \\\"td\\\",\\n th: \\\"th\\\",\\n thead: \\\"thead\\\",\\n tr: \\\"tr\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Aave Community is a decentralised collective of token holders and contributors who collaboratively shape the protocol's future through a structured governance process. This community-driven approach empowers participants to propose, discuss, and vote on key changes, promoting that the protocol's evolution reflects the collective interests of its members.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Governance Roles\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Delegates\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Delegates are community members who have received voting power from other members of the community or through self-delegation. They actively participate in governance by voting on proposals on behalf of those who have entrusted them with their voting power. Some delegates are compensated under the Orbit program.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Delegators\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Delegators are community members who hold AAVE, stkAAVE, or aAAVE tokens but choose to delegate their voting power to another person. The person to whom they delegate their voting power is considered a delegate. This system allows delegators to have their interests represented in governance decisions without having to participate directly in every vote.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Contributors\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Contributors are community members who participate in and dedicate their time to the Aave DAO. They contribute by joining working groups, fulfilling bounties, building on top of the Aave Protocol, or working for the DAO via grants.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Service Providers\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Service providers are specialized entities or groups that offer essential services to maintain and enhance the Aave Protocol. The current service providers are:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Chaos Labs: Risk service provider\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Llamarisk: Risk service provider\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Karpatkey: Finance service provider\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Certora: Security service provider\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Tokenlogic: Finance service provider\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"BGD Labs: Development service provider\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"ACI: Growth and business development service provider\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Guardians\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Aave Guardians are crucial for maintaining the protocol’s security and integrity. They are divided into two groups: Protocol Guardians, who handle emergency responses and can pause markets, and Governance Guardians, who can veto malicious governance proposals. The Guardians operate under a 5/9 multi-sig arrangement.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"For more information on the Guardians’ permissions, refer to \\\", _jsx(_components.a, {\\n href: \\\"https://github.com/bgd-labs/aave-permissions-book\\\",\\n children: \\\"this\\\"\\n }), \\\" detailed view of permissions in Aave systems. For a general overview of their role, see the Medium post about Aave V2 Governance \\\", _jsx(_components.a, {\\n href: \\\"https://medium.com/aave/aave-protocol-governance-v2-has-been-activated-af4a4b228885\\\",\\n children: \\\"here\\\"\\n }), \\\".\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Protocol Emergency Guardian\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"This Guardian holds the EMERGENCY_ADMIN role in Aave V3, as well as similar roles in V2 and other related systems. The primary function of the Protocol Emergency Guardian is to act swiftly in emergency situations to protect the protocol. It is composed of highly active entities within the Aave DAO, such as service providers and delegates. The multi-sig configuration for this Guardian is a 5-of-9 setup. The current Protocol Guardians are shown in the table below and were updated in \\\", _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-renewal-of-aave-guardian-2024/17523/19\\\",\\n children: \\\"this\\\"\\n }), \\\" ARFC Addendum.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.table, {\\n children: [_jsx(_components.thead, {\\n children: _jsxs(_components.tr, {\\n children: [_jsx(_components.th, {\\n children: \\\"Protocol Emergency Guardian\\\"\\n }), _jsx(_components.th, {\\n children: \\\"Address\\\"\\n })]\\n })\\n }), _jsxs(_components.tbody, {\\n children: [_jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Chaos Labs\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0x5d49dBcdd300aECc2C311cFB56593E71c445d60d\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"LlamaRisk\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xbA037E4746ff58c55dc8F27a328C428F258DDACb\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Karpatkey\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0x818C277dBE886b934e60aa047250A73529E26A99\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Certora\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0x4f96743057482a2E10253AFDacDA3fd9CF2C1DC9\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"TokenLogic\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xb647055A9915bF9c8021a684E175A353525b9890\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"BGD Labs\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xf71fc92e2949ccF6A5Fd369a0b402ba80Bc61E02\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"ACI\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0x57ab7ee15cE5ECacB1aB84EE42D5A9d0d8112922\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Ezr3al\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xC5bE5c0134857B4b96F45AA6f6B77DB96Ac1487e\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Stable Lab\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xd4af2E86a27F8F77B0556E081F97B215C9cA8f2E\\\"\\n })]\\n })]\\n })]\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Governance Emergency Guardian\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"This Guardian is responsible for cancelling governance proposals if they are detected as malicious or contain errors, typically identified during the on-chain verification stage by Certora. Unlike the Protocol Emergency Guardian, speed is less critical for this role since governance proposals unfold over a period of five days, allowing adequate time for issues to be identified and addressed. The multi-sig configuration for this Guardian is also a 5-of-9 setup. The current Governance Guardians are shown in the table below and were updated in \\\", _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-renewal-of-aave-guardian-2024/17523/19\\\",\\n children: \\\"this\\\"\\n }), \\\" ARFC Addendum.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.table, {\\n children: [_jsx(_components.thead, {\\n children: _jsxs(_components.tr, {\\n children: [_jsx(_components.th, {\\n children: \\\"Governance Emergency Guardian\\\"\\n }), _jsx(_components.th, {\\n children: \\\"Address\\\"\\n })]\\n })\\n }), _jsxs(_components.tbody, {\\n children: [_jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Seb (Zapper)\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xa1c9ceed5ff78f700dc4930514621843b5fac272\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Mounir (Paraswap)\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xfd639f49Da6cadc98f01B60900C8BE30C38c4B27\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Gavi Galloway (Standard Crypto)\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xbd4DCfA978c6D0d342cE36809AfFFa49d4B7f1F7\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Nenad (Defi Saver)\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xDA5Ae43e179987a66B9831F92223567e1F38BE7D\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Fernando (Balancer)\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0x4C30E33758216aD0d676419c21CB8D014C68099f\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Roger (Chainlink community)\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0xA3103D0ED00d24795Faa2d641ACf6A320EeD7396\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Mariano Conti (DeFi OG)\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0x936CD9654271083cCF93A975919Da0aB3Bc99EF3\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Marin (Lido)\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0x0D2394C027602Dc4c3832Ffd849b5df45DBac0E9\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Certora\\\"\\n }), _jsx(_components.td, {\\n children: \\\"0x4f96743057482a2E10253AFDacDA3fd9CF2C1DC9\\\"\\n })]\\n })]\\n })]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Stewards\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Stewards were introduced to allow the DAO to respond quickly to market changes in order to remain competitive and address risks. They are delegated responsibility over specific parameters within certain boundaries of magnitude and frequency of change. The benefit of this is that minor changes do not need to go through a full governance cycle, increasing speed and reducing governance burden on delegates and tokenholders. At time of writing there are stewards for managing: GHO, lending parameters, and treasury operations.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"GHO Stewards\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The GHO Stewards are a group of Contributors and Service Providers who manage critical parameters for the GHO stablecoin to promote its stability. This group has the authority to adjust the:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"GHO Borrow Cap\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Borrow Rate\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"various GSM parameters like Exposure Cap, Bucket Capacity, Price Strategy, Fee Strategy, and Price Range (Freeze, Unfreeze)\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"The ranges for parameters which the GHO Stewards may adjust are shown in the below table and were proposed in the following ARFCs \\\", _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-gho-stewards/16466\\\",\\n children: \\\"[ARFC] GHO Stewards\\\"\\n }), \\\", \\\", _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-gho-stewards-borrow-rate-update/16956\\\",\\n children: \\\"[ARFC] GHO Stewards + Borrow Rate Update\\\"\\n }), \\\".\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.table, {\\n children: [_jsx(_components.thead, {\\n children: _jsxs(_components.tr, {\\n children: [_jsx(_components.th, {\\n children: \\\"Description\\\"\\n }), _jsx(_components.th, {\\n children: \\\"Value\\\"\\n })]\\n })\\n }), _jsxs(_components.tbody, {\\n children: [_jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"GHO Aave Bucket Capacity\\\"\\n }), _jsx(_components.td, {\\n children: \\\"100% Increase\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"GSM Exposure Cap\\\"\\n }), _jsx(_components.td, {\\n children: \\\"100% Increase\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"GSM Bucket Capacity\\\"\\n }), _jsx(_components.td, {\\n children: \\\"100% Increase\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"GSM Fee Strategy\\\"\\n }), _jsx(_components.td, {\\n children: \\\"+ 0.5%\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"GSM Price Range\\\"\\n }), _jsx(_components.td, {\\n children: \\\"(Freeze, Unfreeze)\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"GHO Borrow Cap\\\"\\n }), _jsx(_components.td, {\\n children: \\\"100M\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Max GHO Borrow Rate Adjustment\\\"\\n }), _jsx(_components.td, {\\n children: \\\"5%\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Max GHO Borrow Rate\\\"\\n }), _jsx(_components.td, {\\n children: \\\"25%\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Frequency of Change\\\"\\n }), _jsx(_components.td, {\\n children: \\\"2 days\\\"\\n })]\\n })]\\n })]\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The creation of GHO Stewards aims to streamline governance, allowing quick adjustments to maintain the GHO peg, especially during market fluctuations. The GHO Stewards operate under a 3-of-4 multi-sig configuration and GHO Stewards at time of writing are:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Karpatkey\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Tokenlogic\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"ACI\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Chaos Labs\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Risk Stewards\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Risk Stewards are responsible for managing critical risk parameters within the Aave Protocol. They are able to make adjustments to supply and borrow caps, reducing the need for frequent community votes. This setup is designed to enable rapid responses to emerging risks while minimising governance overhead.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The parameters that Risk Stewards can change are:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Supply and Borrow Caps: Increasing caps with constraints on frequency and maximum percentage increase to maintain protocol stability.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Collateral Risk Configurations: Adjusting parameters such as Loan-to-Value (LTV), liquidation thresholds, and liquidation bonuses.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Interest Rate Strategies: Fine-tuning base rates, slopes, and optimal points to align with market conditions.\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"The parameters that the Risk Stewards can control are shown in the table below and were discussed in the following proposal: \\\", _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/bgd-risk-steward-phase-1-capsplusrisksteward/12602\\\",\\n children: \\\"BGD. Risk Steward Phase 1: CapsPlusRiskSteward\\\"\\n }), \\\".\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.table, {\\n children: [_jsx(_components.thead, {\\n children: _jsxs(_components.tr, {\\n children: [_jsx(_components.th, {\\n children: \\\"Description\\\"\\n }), _jsx(_components.th, {\\n children: \\\"Value\\\"\\n })]\\n })\\n }), _jsxs(_components.tbody, {\\n children: [_jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Frequency of change\\\"\\n }), _jsx(_components.td, {\\n children: \\\"5 days\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Maximum supply cap increase\\\"\\n }), _jsx(_components.td, {\\n children: \\\"50%\\\"\\n })]\\n }), _jsxs(_components.tr, {\\n children: [_jsx(_components.td, {\\n children: \\\"Maximum borrow cap increase\\\"\\n }), _jsx(_components.td, {\\n children: \\\"50%\\\"\\n })]\\n })]\\n })]\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Risk Stewards operate under strict on-chain validations and are managed by a 1-of-1 multisig. Risk Stewards at the time of writing are:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Chaos Labs\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Finance Stewards\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Please note the Finance Stewards system in not yet live and is for information purposes only at this point, it is planned that this will go live in the near future.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Finance Stewards are responsible for executing pre-approved and budgeted financial operations on behalf of the Aave DAO. They manage the Aave DAO’s funds through a smart contract that acts as an admin of the collector, streamlining the management of treasury assets and reducing the need for frequent on-chain votes.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Finance Stewards have the authority to:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Migrate assets from v2 and deposit into v3\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Use the Aave Swapper to exchange treasury assets\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Withdraw and deposit into V3\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Transfer and stream tokens to pre-approved addresses within set budgets such as ACI \\\", _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-introducing-frontier-staking-as-a-service-for-the-aave-dao/16225\\\",\\n children: \\\"Frontier\\\"\\n }), \\\" Program and ACI \\\", _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-merit-a-new-aave-alignment-user-reward-system/16646\\\",\\n children: \\\"Merit\\\"\\n }), \\\" Program\\\"]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Proposed Finance Stewards at the time of writing are:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Karpatkey\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Tokenlogic\\\"\\n }), \\\"\\\\n\\\"]\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"governance\",\"title\":\"Aave Community\",\"description\":\"Learn about Aave community governance.\",\"difficulty\":0,\"index\":1},\"scope\":{}},\"readingTime\":17},{\"slug\":\"proposals\",\"date\":\"9 Aug, 2024\",\"category\":\"governance\",\"title\":\"Proposals\",\"description\":\"Aave Governance proposal lifecycle.\",\"difficulty\":0,\"index\":2,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n h3: \\\"h3\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Aave Governance allows the community to make decisions on the protocol's future through a structured proposal lifecycle. Proposals can introduce new features, modify parameters, or make other changes to the Aave Protocol. Below is an outline of the proposal lifecycle, from initial idea to execution.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Governance Forum\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The first step in the proposal process is to introduce your idea to the community. The Aave Governance Forum and Discord are the primary platforms for discussing proposals. Here, community members can provide feedback, technical support, and gauge the initial sentiment towards their idea. Engaging with the community early on helps refine the proposal and gather the necessary support before moving to the next stages.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Snapshot Voting\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"TEMP CHECK\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once your proposal has been discussed in the forum, the next step is to gauge community sentiment through a TEMP CHECK vote on the Aave Snapshot Space. TEMP CHECKs serve as informal polls to measure the community’s interest in the proposal. These votes are non-binding and do not require high technical detail or the involvement of DAO service providers. They are a valuable tool for determining whether there is enough interest to proceed with the proposal.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"ARFC (Aave Request for Final Comments)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"If the TEMP CHECK indicates sufficient interest, the proposal can move to the ARFC stage. The ARFC is a more detailed version of the proposal, where relevant service providers are formally invited to provide feedback. This stage includes a thorough specification section that outlines how the proposal will impact Aave Protocol smart contracts. The ARFC serves as a precursor to the formal Aave Improvement Proposal (AIP) and allows for final refinements before moving on-chain.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Creating the On-Chain Payload\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"AIP (Aave Improvement Proposal)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"After passing the Snapshot phase, a proposal that requires on-chain execution moves to the AIP phase. The AIP is the formal proposal payload submitted on-chain and consists of two parts: the proposal metadata (stored as an IPFS hash) and the contract payload. These components are submitted to the Aave Governance contracts on the Ethereum Mainnet, where they will be voted on by the community. Detailed information on creating an AIP can be found in the Aave Developer Documentation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Voting and Execution Timeline\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Voting\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"When the AIP is submitted, the voting process begins. The proposal will initially be in a PENDING status, and will move to ACTIVE once the voting delay period has elapsed. Voting tokens and delegations are held on Ethereum Mainnet, and the voting occurs through governance contracts on the specified network.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The snapshot for voting balances is taken at the block before the proposal becomes ACTIVE. For a proposal to SUCCEED, it must meet two criteria:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"The voting power in favor of the proposal must reach the quorum set by the minimum quorum parameter for the proposal executor.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"The difference between for-votes and against-votes must exceed the vote differential threshold set by the vote differential parameter for the proposal executor.\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"If these conditions are not met, the proposal will be marked as FAILED.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Execution\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"A SUCCEEDED proposal can be executed on Ethereum Mainnet. The execution process involves relaying the vote information through Aave's governance cross-chain infrastructure. If the proposal includes a cross-chain payload, it will be queued on the timelock executor contract on the relevant network.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The timelock delay for execution depends on the proposal's executor. A short executor proposal, typically involving protocol updates, has a 1-day timelock delay. A long executor proposal, which involves changes to core governance permissions, has a 7-day timelock delay. Cross-chain proposals use Aave Delivery Infrastructure (a.DI) to verify messages from designated bridges and execute the payloads.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Proposal Frameworks\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Aave DAO has established frameworks for common proposal types, which streamline the proposal process. These frameworks are adopted and amended through community Snapshot votes.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Caps Update Framework\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Proposals that only involve changing a cap or freezing a reserve can qualify for the direct-to-AIP process under the caps update framework. To qualify:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"The proposal must be provided by a risk service provider or have feedback from at least one risk service provider team.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"The change must involve a new cap implementation, a decrease in the cap, or a change not exceeding a 100% increase in the current cap.\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Asset Onboarding Framework\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"For proposals that involve onboarding new tokens, the asset onboarding framework provides a standardized template and lifecycle. This framework promotes that new tokens are added to the Aave Protocol in a consistent and secure manner.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-update-the-asset-onboarding-framework/15629\\\",\\n children: \\\"Asset Onboarding Framework\\\"\\n })\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"New Chain Deployment Framework\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The New Chain Deployment Framework is a standardized process for deploying the Aave Protocol on new blockchains. This framework aims to create a transparent approach for evaluating and deploying new Aave v3 instances.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-new-chain-deployment-framework/15694\\\",\\n children: \\\"New Chain Deployment Framework Link\\\"\\n })\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Emission Manager Framework\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To allow quick addition of new emissions admins to Aave pool reserves, the process of adding new emissions admins follows a direct-to-AIP framework. This framework also allows pre-authorized inclusion of an emission admin as part of either an ad-hoc steward or current risk steward role to facilitate a more efficient and streamlined onboarding process.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: _jsx(_components.a, {\\n href: \\\"https://governance.vaultera.example/t/arfc-emission-manager-framework-update/16884\\\",\\n children: \\\"Emission Manager Framework Link\\\"\\n })\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"governance\",\"title\":\"Proposals\",\"description\":\"Aave Governance proposal lifecycle.\",\"difficulty\":0,\"index\":2},\"scope\":{}},\"readingTime\":8},{\"slug\":\"voting\",\"date\":\"9 Aug, 2024\",\"category\":\"governance\",\"title\":\"Voting\",\"description\":\"Voting in Aave Governance.\",\"difficulty\":0,\"index\":3,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n em: \\\"em\\\",\\n h2: \\\"h2\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n strong: \\\"strong\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Voting in Aave Governance is a critical process that empowers AAVE, stkAAVE, and aAAVE token holders to shape the protocol’s future. By participating in voting, community members can directly impact decisions on new features, parameter changes, and other key aspects of the protocol. The process typically begins with off-chain voting via Snapshot to gauge community sentiment, followed by on-chain voting for proposals that require formal approval and execution. Voting helps Aave remain a decentralised and community-driven platform, with each token holder's input contributing to the protocol's evolution.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Off-chain Voting (Snapshot)\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Off-chain voting in Aave, conducted via \\\", _jsx(_components.a, {\\n href: \\\"https://snapshot.org/#/aave.eth\\\",\\n children: \\\"Snapshot\\\"\\n }), \\\", is primarily used for gauging community sentiment during the early stages of proposal development, such as Temp Checks and Aave Requests for Comments (ARFCs). These votes are non-binding and serve as informal polls to assess whether there is enough support for a proposal to move forward. The voting period for both Temp Checks and ARFCs lasts three days. Off-chain voting allows token holders to express their views without incurring transaction fees, making it a convenient way to measure the community’s interest and refine proposals before they proceed to the on-chain stage.\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"On-chain Voting (Governance Interfaces)\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"On-chain voting is required for Aave Improvement Proposals (AIPs) that propose changes to the protocol and is conducted through various governance interfaces such as \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example/governance\\\",\\n children: \\\"Aave Labs\\\"\\n }), \\\", \\\", _jsx(_components.a, {\\n href: \\\"https://vote.onaave.com/\\\",\\n children: \\\"BGD Labs\\\"\\n }), \\\", and \\\", _jsx(_components.a, {\\n href: \\\"https://www.tally.xyz/gov/aave\\\",\\n children: \\\"Tally\\\"\\n }), \\\" This process involves a more formal and secure approach, where proposals undergo a thorough review to check for safety and correctness. Once a proposal is approved for on-chain voting, it goes through a one-day delay before becoming active, followed by a voting period. During this time, token holders can cast their votes directly on-chain, with their voting power proportional to the amount of AAVE, stkAAVE, or aAAVE they hold or have been delegated on \\\", _jsx(_components.em, {\\n children: \\\"Ethereum mainnet\\\"\\n }), \\\". The proposal must meet quorum and majority requirements to succeed, after which it is queued with a timelock before execution.\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Voting Timelines\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The following timelines are relevant to the voting process:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Off-chain Voting (Snapshot):\\\"\\n }), \\\" The voting period for Temp Checks and ARFCs lasts three days.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"On-chain Voting:\\\"\\n }), \\\" After a proposal is submitted onchain, there is a one-day delay before it becomes active. The voting period and execution timelock depend on the type of proposal. Most proposals are targeted for the “Short Executor” which has a three-day voting period and one-day timelock for execution. Proposals that modify governance processes are targeted for the “Long Executor,” which has a 10-day voting period and a seven-day timelock for execution.\\\"]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Voting Representatives\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"In Aave Governance, voting representatives facilitate cross-chain voting, especially for users with smart contract wallets or those participating across multiple blockchain networks. A voting representative links your governance decisions to the voting process when your wallet can't participate directly due to technical constraints, like the inability to sign messages for storage proof voting or interact with cross-chain contracts.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"You can select a voting representative through interfaces like Aave Labs interface. This representative can cast votes on your behalf using your delegated voting power, managing voting for multiple users and enhancing flexibility and accessibility for all governance participants.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"governance\",\"title\":\"Voting\",\"description\":\"Voting in Aave Governance.\",\"difficulty\":0,\"index\":3},\"scope\":{}},\"readingTime\":5},{\"slug\":\"isolation-mode\",\"date\":\"9, Aug, 2024\",\"category\":\"supplying\",\"title\":\"Isolation Mode\",\"description\":\"Supply isolated collateral assets.\",\"difficulty\":0,\"index\":5,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Isolation Mode in Aave V3 is a feature designed to safely introduce new or volatile assets into the protocol by limiting how they can be used as collateral. When an asset is designated as an \\\\\\\"Isolated Collateral Asset,\\\\\\\" it can only be used to borrow specific stablecoins that have been approved by Aave Governance. This setup helps to contain the risk associated with these assets. In the Aave Labs interface, assets that can only be supplied in Isolation Mode are clearly marked with an isolated icon and description, making it easy for users to identify them.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Supplying an Isolated Asset\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"When you supply an Isolated Asset, it may be used as collateral under certain conditions. If it's the first asset you’re supplying or if you don’t have any other assets enabled as collateral, you can use the Isolated Asset to borrow approved stablecoins. However, if you already have other assets enabled as collateral, the Isolated Asset can still be supplied, but it won’t be eligible as collateral. This means you can earn interest on it, but you can’t use it to borrow unless it’s your only collateralised asset.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Borrowing in Isolation Mode\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"When using an Isolated Asset as collateral, you are limited to borrowing only the stablecoins that are approved for Isolation Mode. This restriction helps manage the risk associated with these assets. Additionally, while in Isolation Mode, you cannot enable any other assets as collateral, including other Isolated Collateral Assets. This enforces that the borrowing risks remain contained within the guidelines set by Aave Governance.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Exiting Isolation Mode\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"If you decide to exit Isolation Mode, the process requires that you first repay any outstanding debt associated with the Isolated Asset. Once the debt is cleared, you can disable the Isolated Asset as collateral, allowing you to revert to the standard borrowing options available in the protocol.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9, Aug, 2024\",\"category\":\"supplying\",\"title\":\"Isolation Mode\",\"description\":\"Supply isolated collateral assets.\",\"difficulty\":0,\"index\":5},\"scope\":{}},\"readingTime\":3},{\"slug\":\"supply-tokens\",\"date\":\"9, Aug, 2024\",\"category\":\"supplying\",\"title\":\"Supply Tokens\",\"description\":\"Supply tokens to the Aave Protocol.\",\"difficulty\":0,\"index\":1,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Supplying tokens to the Aave Protocol allows you to earn interest on your digital assets and utilize supplied tokens as collateral. When tokens are supplied, they are transferred to the Aave liquidity pool, a system of smart contracts that facilitates overcollateralized borrowing of tokens. Supplied tokens automatically accumulate interest by updating in balance at the current market supply rate. This interest accrual happens dynamically as the balance of your supplied tokens increases linearly over time, reflecting the current rate allocated to suppliers.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Interest rates for supplied tokens are determined by the borrow utilization rate, which measures the proportion of assets currently borrowed against the total supplied in the pool, and by governance parameters that can be adjusted through community decisions. These parameters, including collateralization requirements and interest rates for suppliers and borrowers, are influenced by on-chain inputs such as token balances, oracle prices, and the borrow utilization ratio. As liquidity is supplied, borrowed, repaid, or withdrawn from the pool, the interest rates are updated accordingly.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Tokens can be supplied through protocol smart contracts or through a frontend such as the Aave Labs interface, by performing the following steps:\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To begin, press ‘Connect Wallet’ and select the Ethereum wallet provider corresponding to the wallet holding tokens intended to supply.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Select Token To Supply\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once connected, navigate to the ‘Dashboard’ where you’ll find the ‘Assets To Supply’ table, which lists current token balances and asset parameters. More details on supply and borrow parameters can be found by selecting the individual token icon, which will navigate to the reserve details page.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Approve Token Transfer\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"In order to transfer tokens on an Ethereum-based network, the Aave Pool smart contract must be granted an allowance to transfer tokens from the connected wallet address. Approvals can be performed through transaction (which will incur a network fee) or signature (which does not incur a network fee). After selecting a token to supply, a modal will appear which will prompt a transaction or message signature request in the connected wallet.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 4: Perform Supply Transaction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"After approval, enter the amount you wish to supply and confirm, which will prompt a transaction in the connected wallet. Your supplied tokens are then added to the Aave liquidity pool, where they are made available for borrowers. The supplied tokens will start earning interest immediately, which can be monitored from the ‘Dashboard’ tab.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9, Aug, 2024\",\"category\":\"supplying\",\"title\":\"Supply Tokens\",\"description\":\"Supply tokens to the Aave Protocol.\",\"difficulty\":0,\"index\":1},\"scope\":{}},\"readingTime\":4},{\"slug\":\"toggle-collateral-status\",\"date\":\"9, Aug, 2024\",\"category\":\"supplying\",\"title\":\"Toggle Collateral Status\",\"description\":\"Toggle collateral status of supply positions.\",\"difficulty\":1,\"index\":4,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Supplying tokens to the Aave Protocol allows you to use these assets as collateral to borrow other assets. Managing the collateral status of your supplied tokens is crucial for maintaining borrowing power and avoiding liquidation. The health factor is a key indicator: a value above 1 means your collateral is sufficient, while a value below 1 signals that your position is at risk of liquidation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"You can manage the collateral status of your supplied tokens through protocol smart contracts or through a frontend such as Aave Labs interface by performing the following steps:\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To begin, press ‘Connect Wallet’ and select the Ethereum wallet provider corresponding to the wallet holding the supplied tokens.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Navigate to 'Your Supplies'\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once connected, navigate to the ‘Dashboard’ where you’ll find the 'Your Supplies' section. This table lists the tokens you have supplied and their current collateral status.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Toggle Collateral Status\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To manage the collateral status, locate the token you wish to adjust and toggle the collateral switch. This action will update the status, allowing the token to be used (or not used) as collateral. Confirm the transaction in your wallet to apply the change.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 4: Monitor Your Health Factor\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Regularly monitor your health factor from the ‘Dashboard’, especially if you have active borrow positions. If the value of your collateral drops or the amount of borrowed assets increases, consider supplying more tokens or repaying part of your borrow position to improve your health factor.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Parameters such as Loan-to-Value (LTV) and Liquidation Threshold (LT), set by Aave Governance, influence your borrowing power and risk. LTV defines the maximum ratio at which a new borrow position can be opened, while LT indicates the ratio of collateral at which a borrow position may be liquidated. These parameters are established through community proposals and voting to maintain protocol stability.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Regularly check your health factor and keep an eye on governance proposals to adjust your collateral as needed and avoid liquidation.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9, Aug, 2024\",\"category\":\"supplying\",\"title\":\"Toggle Collateral Status\",\"description\":\"Toggle collateral status of supply positions.\",\"difficulty\":1,\"index\":4},\"scope\":{}},\"readingTime\":4},{\"slug\":\"withdraw-tokens\",\"date\":\"9, Aug, 2024\",\"category\":\"supplying\",\"title\":\"Withdraw Tokens\",\"description\":\"Withdraw tokens from the Aave Protocol.\",\"difficulty\":0,\"index\":2,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Withdrawing tokens from the Aave Protocol transfers underlying supplied assets along with any accrued interest, provided there is sufficient liquidity in the pool. This means suppliers can withdraw up to the amount available in the pool that is not currently borrowed. The process varies slightly depending on the type of token and the withdrawal method, and can be performed through protocl smart contracts or a frontend such as the \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example\\\",\\n children: \\\"Aave Labs interface\\\"\\n }), \\\".\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To begin, press ‘Connect Wallet’ and select the Ethereum wallet provider corresponding to the wallet where the tokens are supplied.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Navigate to 'Your Supplies'\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once connected, navigate to the ‘Dashboard’ and locate the ‘Your Supplies’ section. This table displays all tokens you have supplied to the Aave Protocol.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Select Token to Withdraw\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Choose the token you wish to withdraw from the list. Verify that there is enough available liquidity in the pool to support your withdrawal. If the token is not being used as collateral for an active borrow position, you can proceed to withdraw the desired amount.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 4: Confirm Withdrawal\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Enter the amount you want to withdraw and confirm the transaction in your wallet. If you are withdrawing the same underlying token that you supplied (e.g., WETH to WETH), no additional approval transaction is needed. However, if you’re withdrawing to a network base token, such as ETH, the Aave Protocol stores these as wrapped tokens (e.g., WETH). In this case, the withdrawal process involves the WrappedTokenGateway contract, where the WETH is unwrapped and withdrawn in a single transaction.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 5: Handling Collateralised Tokens\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"If your supplied tokens are used as collateral, you may need to repay part of your borrow position or supply additional collateral to maintain a healthy balance before you can withdraw. Regularly monitoring your health factor will help you manage this effectively.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 6: Withdrawing and Switching Tokens\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Aave Labs interface also offers a feature to withdraw and switch to a different token in one action. This requires token approval for both the withdrawal and the switch. Ensure you review the necessary approvals in your wallet before proceeding.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9, Aug, 2024\",\"category\":\"supplying\",\"title\":\"Withdraw Tokens\",\"description\":\"Withdraw tokens from the Aave Protocol.\",\"difficulty\":0,\"index\":2},\"scope\":{}},\"readingTime\":4},{\"slug\":\"safety-incentives\",\"date\":\"9 Aug, 2024\",\"category\":\"umbrella\",\"title\":\"Safety Incentives\",\"description\":\"Incentives for safety module contributors.\",\"difficulty\":1,\"index\":4,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Safety Incentives are rewards distributed to participants who stake their assets in the Aave Safety Module (both Umbrella and legacy). These incentives serve as compensation for the risk taken by stakers, whose assets may be slashed to cover protocol deficits in the event of a shortfall.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Umbrella Rewards System\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Umbrella system features a dynamic rewards mechanism that automatically adjusts emission rates based on total staked amounts relative to target liquidity levels. When staking falls below governance-defined targets, rewards increase to attract more participants. When staking exceeds targets, rates decrease proportionally. This mathematical model ensures sustainable reward distribution while optimizing for ideal coverage levels.\\\\nEach staked asset can simultaneously earn up to eight different reward token types, with governance controlling target liquidity levels, maximum emission rates, reward token selection, and distribution periods. The system provides predictable treasury management by capping maximum expenses at target liquidity levels, creating more efficient budget allocation compared to static reward systems.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Legacy Safety Module Rewards\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"For the legacy Safety Module (stkAAVE, stkABPT, stkGHO), rewards are primarily distributed in the form of AAVE tokens. The emission parameters are determined by Aave Governance.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The emission parameters are allocated from the Ecosystem Reserve (AAVE Tokens) and/or the Protocol Treasury. Governance votes allow AAVE token holders to influence how much of the reserve or treasury is allocated to these incentives and how they are distributed over time.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Claiming Rewards\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Safety Incentives can be claimed at any point while tokens are staked or after unstaking from the safety module. Claiming can be performed through protocol smart contracts or through a frontend such as \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example/\\\",\\n children: \\\"Aave Labs interface\\\"\\n }), \\\", by performing the following steps:\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To start, press 'Connect Wallet' and choose the Ethereum wallet provider associated with your staked tokens.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Navigate to the 'Stake' Tab\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once connected, go to the 'Stake' tab within the Aave interface, where you can monitor your staked assets and the accumulated Safety Incentives.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Claim Rewards\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Within the 'Stake' tab, you will see the option to claim your accumulated rewards. Click on the 'Claim' button, which will prompt a transaction in your connected wallet. Confirm the transaction to claim Safety Incentives.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"umbrella\",\"title\":\"Safety Incentives\",\"description\":\"Incentives for safety module contributors.\",\"difficulty\":1,\"index\":4},\"scope\":{}},\"readingTime\":4},{\"slug\":\"stake\",\"date\":\"9 Aug, 2024\",\"category\":\"umbrella\",\"title\":\"Stake\",\"description\":\"Supply tokens in Aave safety module.\",\"difficulty\":0,\"index\":2,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n h3: \\\"h3\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The Aave Safety Module has been upgraded to Umbrella, a more efficient system for protocol protection. Users can now stake their Aave aTokens (like aUSDC, aUSDT, aWETH) or GHO to contribute to protocol security while earning rewards. By staking, participants add an additional layer of protection, with the acknowledgement that their assets may be slashed in the event of a shortfall to cover any protocol deficits.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Tokens can be supplied through protocol smart contracts or through a frontend such as \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example/\\\",\\n children: \\\"Aave Labs interface\\\"\\n }), \\\", by performing the following steps:\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Available Staking Options\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Umbrella (New System)\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"Aave aTokens (e.g., aUSDC, aUSDT, aWETH)\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"GHO\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Legacy Safety Module\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: _jsx(_components.a, {\\n href: \\\"https://etherscan.io/address/0x7fc66500c84a76ad7e9c93437bfc5ac33e2ddae9\\\",\\n children: \\\"AAVE\\\"\\n })\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.a, {\\n href: \\\"https://etherscan.io/address/0x3de27efa2f1aa663ae5d458857e731c129069f29\\\",\\n children: \\\"ABPT\\\"\\n }), \\\" (\\\", _jsx(_components.a, {\\n href: \\\"https://app.balancer.fi/#/ethereum/pool/0x3de27efa2f1aa663ae5d458857e731c129069f29000200000000000000000588\\\",\\n children: \\\"Underlying Balancer Token Pool\\\"\\n }), \\\")\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: _jsx(_components.a, {\\n href: \\\"https://etherscan.io/address/0x40d16fc0246ad3160ccc09b8d0d3a2cd28ae6c2f\\\",\\n children: \\\"GHO\\\"\\n })\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To begin, press 'Connect Wallet' and select the Ethereum wallet provider corresponding to the wallet holding tokens intended to supply to safety module.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Select Safety Module Pool\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once connected, navigate to the 'Stake' tab where you'll find a list of available safety module pools, including both Umbrella and legacy options.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Approve Token Transfer\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"In order to transfer tokens on an Ethereum-based network, the staked token smart contract must be granted an allowance to transfer tokens from the connected wallet address. After selecting a pool to supply, a modal will appear which will prompt a transaction in the connected wallet.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 4: Perform Stake Transaction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"After approval, enter the amount you wish to stake and confirm which will prompt a transaction in the connect wallet. Your tokens are then added to the selected safety module, where they will start earning safety incentives, which can be monitored from the 'Stake' tab.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Understanding Slashing Risks\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"When staking in either Umbrella or the legacy Safety Module, it's important to be aware of the potential slashing risks. Slashing refers to the reduction of staked assets in the event of a shortfall event within the Aave Protocol. This mechanism is in place to protect the protocol by using a portion of staked assets to cover any deficits that may arise.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Umbrella Slashing\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Umbrella uses automated slashing based on actual deficit levels, with each staked asset covering only its corresponding borrowed asset on the same network.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h3, {\\n children: \\\"Legacy Safety Module Slashing\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Slashing events in the legacy Safety Module occur through an onchain governance vote. Assets can be used to cover deficit up to the maximum slashing percentage. The Umbrella activation proposal has modified slashing percentages to the following which are subject to change by future governance decisions:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"stkAAVE and stkABPT: Maximum slashing risk is up to 20% of the staked assets\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.li, {\\n children: \\\"stkGHO: Maximum slashing risk is up to 0% of the staked assets (slashing disabled)\\\"\\n }), \\\"\\\\n\\\"]\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"umbrella\",\"title\":\"Stake\",\"description\":\"Supply tokens in Aave safety module.\",\"difficulty\":0,\"index\":2},\"scope\":{}},\"readingTime\":5},{\"slug\":\"umbrella\",\"date\":\"5 Jun, 2024\",\"category\":\"umbrella\",\"title\":\"Umbrella\",\"description\":\"The upgraded version of the Safety Module.\",\"difficulty\":1,\"index\":1,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"What is Umbrella?\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Umbrella is Aave's upgraded Safety Module that provides automated protection against protocol bad debt while enabling users to earn rewards. Users stake their aTokens to contribute to protocol security, earning additional yields beyond their standard Aave supply returns in exchange for accepting slashing risk.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Unlike the legacy Safety Module that required governance intervention for slashing decisions, Umbrella operates through automated smart contract logic. When deficits occur in specific assets, the system immediately burns corresponding staked aTokens to cover the shortfall without manual intervention or governance delays.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"System Architecture\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"When you stake aTokens in Umbrella, you continue accruing your normal Aave yield while earning additional rewards distributed in tokens like GHO or AAVE. The system wraps your rebasing aTokens transparently, so while your token balance remains static, the underlying value continues growing through Aave's interest accrual.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Slashing risk is isolated to specific asset-network pairs. Staking aUSDC on Arbitrum exclusively covers USDC deficits on Arbitrum's Aave deployment. This isolation ensures your exposure remains limited to the particular risk profile you select.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The protocol implements deficit offset mechanisms as a protective layer. For example, if USDT staking has a 100,000 USDT offset configured, the Aave DAO absorbs the first 100,000 USDT of any deficit before affecting staker funds. Historical data shows deficits represent approximately 0.000004% of outstanding borrows monthly across all Aave deployments.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Supported Networks and Assets\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Umbrella is initially deployed on Ethereum supporting USDC, USDT, WETH, and GHO staking. Expansion to additional networks and assets is subject to governance approval. Asset selection prioritizes highly borrowed tokens with potential deficit exposure.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Staking Process\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Participation requires aTokens or GHO as underlying assets. Users holding standard tokens can supply them to Aave first to receive aTokens, or utilize the Umbrella interface's automatic conversion functionality.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Access Umbrella through stake.onaave.com or the staking section within the main Aave application. The staking process involves two transactions: first approving the contract to transfer your tokens, then executing the stake operation. The interface handles necessary conversions automatically, including ETH to WETH wrapping and aToken wrapping for staking compatibility.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Upon successful staking, rewards begin accruing immediately across both Aave yield generation and Umbrella reward distribution. Rewards accumulate continuously and may be claimed at any time without restriction.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Dynamic Rewards Structure\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Umbrella employs a dynamic rewards system that adjusts emission rates based on total staked amounts relative to target liquidity levels. When staked amounts fall below targets, emission rates increase to incentivize additional participation. When staking exceeds targets, rates decrease proportionally.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Each staked asset supports up to eight simultaneous reward token types. The mathematical model behind reward distribution optimizes for capital efficiency while ensuring reward yields typically exceed potential slashing exposure. Specific rates depend on governance parameters and current market conditions.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Risk Assessment\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The primary risk involves automated slashing when deficits occur in corresponding assets. This risk remains historically low given Aave's operational track record and the protective effect of deficit offsets. The legacy Safety Module has never executed a slashing event throughout its operational history.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Standard smart contract risks apply as with any DeFi protocol. Umbrella has undergone comprehensive security auditing by four independent firms: Certora, MixBytes, Ackee Blockchain, and StErMi.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Unstaking requires completion of a 20-day cooldown period followed by a 2-day withdrawal window. During cooldown, staked assets remain at risk but continue earning rewards.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Migration from Legacy Safety Module\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Current stkAAVE and stkABPT holders may continue using existing systems during Umbrella's bootstrap phase. These legacy systems will operate with reduced slashing exposure (20% maximum versus previous 30%) until sufficient Umbrella liquidity is established.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"stkGHO holders have two migration options: remain in the legacy system with eliminated slashing risk and cooldown requirements but reduced rewards, or migrate to Umbrella's stkGHO for enhanced rewards while accepting standard slashing risk and cooldown periods. Migration requires cooling down legacy positions, unstaking, then restaking through Umbrella.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Operational Advantages\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Umbrella provides superior capital efficiency by utilizing aTokens that directly correspond to deficit assets, eliminating the need to liquidate unrelated tokens like AAVE to cover shortfalls. The automated response system removes governance bottlenecks and subjective decision-making from deficit coverage.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Cross-network deployment capability extends protection across Aave's entire ecosystem rather than limiting coverage to Ethereum. The flexible rewards architecture supports multiple token types and dynamic rate adjustments that optimize for target liquidity levels.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"5 Jun, 2024\",\"category\":\"umbrella\",\"title\":\"Umbrella\",\"description\":\"The upgraded version of the Safety Module.\",\"difficulty\":1,\"index\":1},\"scope\":{}},\"readingTime\":7},{\"slug\":\"unstake\",\"date\":\"9 Aug, 2024\",\"category\":\"umbrella\",\"title\":\"Unstake\",\"description\":\"Redeem tokens from Aave safety module.\",\"difficulty\":0,\"index\":3,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Unstaking from the Aave Safety Module (both Umbrella and legacy) allows holders of staked tokens to withdraw their underlying tokens. The process involves a mandatory cooldown period, which must be completed before tokens can be unstaked. Participants earn Safety Incentives during their staking period, which can be claimed at any time—either while staking or after unstaking.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"The unstaking process can be performed through protocol smart contracts or through a frontend such as \\\", _jsx(_components.a, {\\n href: \\\"https://app.vaultera.example/\\\",\\n children: \\\"Aave Labs interface\\\"\\n }), \\\", by performing the following steps:\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 1: Connect Wallet\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To begin, press 'Connect Wallet' and select the Ethereum wallet provider corresponding to the wallet holding the staked tokens intended to be unstaked from the Safety Module.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 2: Navigate to Staking Page\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Once connected, navigate to the 'Stake' tab where you can find the balances of staked tokens and buttons to performing the unstaking process.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 3: Activate the Cooldown Period\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To unstake your tokens, you must first activate the cooldown period. This requires a transaction in the connected wallet. The cooldown period lasts 20 days, during which you cannot unstake your tokens.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Step 4: Unstake After the Cooldown Period\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"After the cooldown period completes, you have a 2-day window to unstake your tokens. If you do not unstake within this window, you will need to activate the cooldown period again and wait another 20 days.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"This unstake transaction moves underyling tokens from the Safety Module and will be available in the connected wallet once the transaction is confirmed.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Claiming Incentives\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Safety Incentives can be claimed at any time—either while your staking position is active or after you've unstaked your tokens. Incentives can be claimed from the 'Stake' tab, which displays pending rewards and will be sent to your connected wallet upon claiming.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Actions Affecting Cooldown Period\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The cooldown period is influenced by various actions involving staked tokens. The following outlines how these actions affect the cooldown period:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Staking Additional Tokens: Staking additional tokens during an active cooldown does not affect the ongoing cooldown period. The newly staked tokens will not be eligible for unstaking until a new cooldown period is initiated and completed for those tokens.\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Unstaking Tokens: After the cooldown period has elapsed, only the amount of tokens that were staked and in cooldown can be unstaked. Unstaking resets the cooldown period to zero for the unstaked amount, requiring a new cooldown to be activated for any remaining staked tokens.\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Claiming Safety Incentives: Claiming safety incentives does not affect the cooldown period. The cooldown period continues unaffected regardless of safety incentive claims.\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Transferring Staked Tokens: The sender's cooldown remains unaffected by the transfer. For the recipient, the cooldown status is independent and must be initiated or continued based on their own cooldown status. Transferred tokens will not automatically inherit the cooldown period of the sender.\\\"\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\"]\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"umbrella\",\"title\":\"Unstake\",\"description\":\"Redeem tokens from Aave safety module.\",\"difficulty\":0,\"index\":3},\"scope\":{}},\"readingTime\":5},{\"slug\":\"blockchain\",\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Blockchain\",\"description\":\"Distributed ledger technology.\",\"difficulty\":0,\"index\":2,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n li: \\\"li\\\",\\n ol: \\\"ol\\\",\\n p: \\\"p\\\",\\n strong: \\\"strong\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"A blockchain is a decentralised, distributed ledger system designed to record and verify transactions across a network of computers. This compels that no single entity or company controls the entire network, promoting a system of collective agreement and transparency. Unlike traditional databases that rely on central authorities (private servers owned by companies who set all the rules and make all the decisions), blockchains operate on a peer-to-peer network where every participant, known as nodes, has access to the entire ledger (the information is spread across multiple nodes or computers and each has an entire copy of the information). This decentralisation enhances both security and transparency, as each transaction is visible to all participants and cannot be altered without consensus (all nodes agreeing) from the network.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The core of blockchain technology lies in its unique distributed or decentralised structure. Transactions are grouped into units called \\\\\\\"blocks.\\\\\\\" Each block contains a list of transactions that have been validated (consensus) by the network. Once a block is filled with transactions, it is added to the existing chain of blocks in a sequential manner that is time stamped. This process creates a continuous, unalterable chain of blocks, hence the name \\\\\\\"blockchain.\\\\\\\" Each block contains a reference to the previous block, forming a chronological sequence. This structure makes it extremely difficult to alter any information in a block without changing all subsequent blocks, which would require the consensus of the majority of the network.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Decentralised consensus\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"What sets blockchain apart from traditional databases is its decentralised nature and the consensus mechanisms used to validate transactions. In a traditional system, a central authority, such as a bank or government agency, maintains and verifies transactions. In contrast, a blockchain uses various consensus algorithms, like Proof of Work (PoW) or Proof of Stake (PoS), to achieve agreement among nodes. This is how transactions are verified and proved valid. These algorithms validate that all participants agree on the state of the ledger, making it nearly impossible for a single participant to manipulate or fraudulently alter the data.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Blockchains are best known as the underlying technology behind cryptocurrencies such as Bitcoin and Ethereum and they are the base technology of web3. Bitcoin, the first and most well-known cryptocurrency, was created to provide a decentralised digital currency that operates without the need for intermediaries like banks. Its blockchain serves as a public ledger where every transaction is recorded and verified by network participants (nodes), safeguarding the integrity and security of the currency. Similarly, Ethereum introduced the concept of 'smart contracts'—self-executing digital agreements that run on blockchain technology, enabling trustless execution of transactions.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"How the Ethereum blockchain works\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Ethereum, launched in 2015, is a blockchain that extends beyond simple transactions by enabling the creation of decentralised applications (dApps) and smart contracts. Here’s an overview of how Ethereum’s blockchain operates:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ol, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Smart Contracts:\\\"\\n }), \\\" Smart contracts are self-executing contracts with the terms of the agreement written directly into code. They run on the Ethereum Virtual Machine (EVM), a decentralised computing environment that executes the code (terms and conditions) of smart contracts. When a network participant interacts with a smart contract, the contract executes the agreed-upon actions, such as transferring funds or updating records. Smart contracts enable trustless transactions that don't need to be verified by intermediaries.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Ethereum Virtual Machine (EVM):\\\"\\n }), \\\" The EVM is a critical component of Ethereum. It provides a runtime environment for executing smart contracts and dApps. The EVM is decentralised, meaning that the execution of code occurs across all nodes in the Ethereum network. Distributed execution validates that smart contracts are executed consistently and transparently.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Ethereum Accounts:\\\"\\n }), \\\" Ethereum supports two types of accounts—externally owned accounts (EOAs) and contract accounts. EOAs are controlled by private keys and can send and receive Ether (ETH), the native cryptocurrency of Ethereum. Contract accounts, on the other hand, are controlled by the code of smart contracts and can interact with EOAs and other contracts.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Transactions and Gas:\\\"\\n }), \\\" Transactions on the Ethereum network involve sending Ether or interacting with smart contracts. Each transaction requires a certain amount of computational work, measured in \\\\\\\"gas.\\\\\\\" Gas is a unit of measure for computational effort, and users must pay for gas to execute transactions and smart contracts. Gas costs exist so that the network remains efficient and prevents spam or abuse.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Consensus Mechanism - Proof of Stake (PoS):\\\"\\n }), \\\" Ethereum initially used Proof of Work (PoW) as its consensus mechanism, but it has transitioned to Proof of Stake (PoS) with the Ethereum 2.0 upgrade. PoS is a more energy-efficient consensus algorithm where validators are chosen to create new blocks based on the amount of cryptocurrency they hold and are willing to \\\\\\\"stake\\\\\\\" as collateral. Validators are rewarded for participating in the network and safeguarding its security, while also being penalized for dishonest behavior.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Interoperability and Tokens:\\\"\\n }), \\\" Ethereum’s blockchain also enables the creation of various tokens through standards such as ERC-20 and ERC-721. ERC-20 tokens are fungible tokens used for creating cryptocurrencies and other digital assets. ERC-721 tokens are non-fungible tokens (NFTs) that represent unique digital items or assets. These tokens expand Ethereum’s functionality and facilitate the development of diverse applications and ecosystems.\\\"]\\n }), \\\"\\\\n\\\"]\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Blockchain\",\"description\":\"Distributed ledger technology.\",\"difficulty\":0,\"index\":2},\"scope\":{}},\"readingTime\":8},{\"slug\":\"defi\",\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"DeFi\",\"description\":\"ReDeFining financial systems.\",\"difficulty\":1,\"index\":5,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Decentralised Finance, or DeFi, leverages blockchains and smart contracts to create an open, transparent, and decentralised financial ecosystem. At its core, DeFi aims to improve upon traditional financial systems without the reliance on centralized institutions such as banks, brokers, and financial intermediaries. DeFi offers a novel approach to financial services, marked by increased accessibility, transparency, and control for users.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"DeFi operates on blockchain networks, with Ethereum being the first and most prominent platform. Most of the first DeFi applications are also now deployed on Layer 2 blockchains, such as Arbitrum, Optimism, and ZKSync. Unlike traditional financial systems that rely on intermediaries to process and verify transactions, DeFi uses decentralised networks to perform these functions. By removing intermediaries, DeFi aims to lower costs, reduce barriers to entry, and enhance the efficiency of financial transactions.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"Central to the DeFi ecosystem are smart contracts (see \\\", _jsx(_components.a, {\\n href: \\\"./smart-contracts.mdx\\\",\\n children: \\\"Smart Contracts\\\"\\n }), \\\") — self-executing programs that automate the execution of financial agreements based on predefined conditions. In a decentralised liquidity protocol like Aave, a smart contract validates the collateralisation of a borrow position and handles distribution of tokens in supply, borrow, repay, withdraw, and liquidation interactions. The use of smart contracts establishes that transactions are executed as programmed, without the need for manual intervention. This approach enables the protocol to operate continuously and also reduces the potential for human error or manipulation.\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Open access\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"One of the key benefits of DeFi is its ability to provide open access to financial services. Traditional financial systems often require intermediaries and come with various barriers, such as high fees, geographic limitations, and stringent eligibility criteria. DeFi platforms, in contrast, are designed to be inclusive, allowing anyone with an internet connection to participate. This open access is made possible by the decentralised nature of blockchain networks, which do not discriminate based on geographic location or socio-economic status.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Transparency is another fundamental aspect of DeFi. Transactions and interactions within DeFi platforms are recorded on public blockchains, creating an immutable and transparent ledger. This means that all participants can view and verify transactions, which fosters trust and accountability. The transparency of DeFi platforms enables users to track the flow of assets and audit the operations of smart contracts, thereby reducing the risk of fraud and manipulation.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The programmability of smart contracts is a defining feature of DeFi. These contracts allow for the creation of complex financial products and services by encoding business logic into code. For example, DeFi platforms can create automated investment strategies, decentralised derivatives, and synthetic assets that mirror traditional financial instruments. This programmability provides developers with a high degree of flexibility and customization, enabling them to tailor financial products to their specific needs.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"DeFi applications\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"DeFi encompasses a wide range of financial services and components, each contributing to the overall ecosystem. Decentralised exchanges (DEXs) are a prominent example, allowing users to swap cryptocurrencies and other digital assets directly with one another, without the need for a centralized exchange. DEXs operate through smart contracts that facilitate trades, manage liquidity, and determine prices. This peer-to-peer trading model enhances security and reduces reliance on intermediaries.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Liquidity protocols such as Aave are another crucial component of DeFi. These platforms enable users to supply assets and earn interest or borrow assets by providing collateral. The process is automated through smart contracts, which determine interest rates, manage collateral, and handle repayments. By eliminating intermediaries and automating the liquidity provisioning process, DeFi platforms offer more efficient and accessible financial services.\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [_jsx(_components.a, {\\n href: \\\"./stablecoins.mdx\\\",\\n children: \\\"Stablecoins\\\"\\n }), \\\" play a significant role in the DeFi ecosystem by providing a stable medium of exchange. Unlike traditional cryptocurrencies, which can be highly volatile, stablecoins are designed to maintain a stable value relative to a fiat currency, such as the US Dollar. This stability is achieved through various mechanisms, such as being backed by reserves or collateralised by other assets. Stablecoins are essential for facilitating transactions, reducing price volatility, and serving as a reliable store of value within the DeFi ecosystem.\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Decentralised Autonomous Organizations (DAOs) represent a governance model that allows for decentralised decision-making within DeFi projects. DAOs are organizations governed by smart contracts and operated by community members who hold governance tokens. These tokens grant voting rights on proposals and protocol upgrades, enabling collective decision-making and overseeing that the direction of the project reflects the interests of its community. DAOs enhance the democratic nature of DeFi and provide a mechanism for community-driven development.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"DeFi risks\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Despite its many advantages, DeFi faces several challenges and risks. Smart contract vulnerabilities are a significant concern, as bugs or exploits in the code can lead to security breaches or loss of funds. Rigorous testing, third-party code audits, and formal verification are essential to mitigate these risks and enhance the reliability of DeFi platforms.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Market risks and volatility are inherent in the DeFi space. The value of assets, including cryptocurrencies and tokens, can experience significant fluctuations, affecting the stability and profitability of DeFi investments. Users should be aware of these risks and conduct thorough research before participating in DeFi activities.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Scalability and network congestion are also concerns for DeFi platforms, particularly those operating on the Ethereum network. High demand for DeFi services can lead to network congestion and increased transaction fees. Solutions such as Layer 2 networks help improve the costs and speed of DeFi protocols.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Security and custodial risks are important considerations in DeFi. While blockchain technology offers enhanced security through decentralisation and cryptographic mechanisms, users must take precautions to protect their private keys and wallets. Loss or theft of these credentials can result in the loss of assets, highlighting the importance of securing one's personal keys.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"DeFi\",\"description\":\"ReDeFining financial systems.\",\"difficulty\":1,\"index\":5},\"scope\":{}},\"readingTime\":9},{\"slug\":\"smart-contracts\",\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Smart Contracts\",\"description\":\"Self-executing agreements.\",\"difficulty\":1,\"index\":4,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n li: \\\"li\\\",\\n ol: \\\"ol\\\",\\n p: \\\"p\\\",\\n strong: \\\"strong\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Smart contracts are self-executing programs that automate agreements by encoding the terms directly into code. When an address interacts with a smart contract, the contract executes the agreed-upon actions, such as transferring assets or updating internal accounting. This automation eliminates the need for intermediaries, making transactions more efficient and reducing the potential for human error or manipulation. By relying on code rather than a third parties, smart contracts enable trustless and transparent operations, enabling all parties involved to have confidence in the outcome.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Smart contracts are integral to many blockchain applications, as they are executed by blockchain networks like Ethereum, which functions as a global computer network. These networks process and validate the conditions set within each smart contract, updating the state of the contract with every new block added to the chain. This decentralised execution validates that smart contracts run precisely as programmed, without the risk of interference or manipulation. The combination of immutability and public auditability (transparency) in smart contracts provides a high level of trust and security, making them a foundational element in the development of decentralised applications such as identity, finance, and more.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"How smart contracts work\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Here’s a more detailed breakdown of how smart contracts function on Ethereum and EVM-based networks:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ol, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Interaction and Execution:\\\"\\n }), \\\" Once a smart contract is deployed, it awaits interactions from users or other contracts. When a transaction is submitted to the smart contract, it triggers the contract’s code. For example, in a decentralised liquidity protocol, a smart contract might transfer funds from a liquidity pool to a borrower upon the completion of certain criteria, such as collateral verification and interest calculation.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Consensus and Validation:\\\"\\n }), \\\" In blockchain networks like Ethereum, the execution of smart contracts is validated by a consensus mechanism. Each node in the network processes the contract’s code and verifies that the conditions are met before executing any actions. This decentralised validation enforces that the contract operates consistently and fairly, according to its programmed logic.\\\"]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Benefits of smart contracts\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Smart contracts offer several significant benefits that enhance the efficiency, security, and reliability of transactions:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Predictability:\\\"\\n }), \\\" By encoding the terms of an agreement directly into code, smart contracts validate that actions are carried out exactly as specified. This predictability minimizes human error and operational inefficiencies.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Trustless Operations:\\\"\\n }), \\\" One of the defining features of smart contracts is their ability to operate in a trustless environment. Trustless means that parties involved in the contract do not need to trust each other or a third party; they can rely on the code to enforce the agreement. This trustless nature is achieved through the blockchain’s decentralised architecture, which enforces that the contract’s execution is transparent and tamper-proof.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Transparency:\\\"\\n }), \\\" All interactions with smart contracts are recorded on the blockchain, creating an immutable and publicly accessible ledger. This transparency allows participants to verify the contract’s terms and actions, promoting accountability and trust. Any changes or updates to the contract are visible to all network participants, ensuring that the contract operates in an open and transparent manner.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Security:\\\"\\n }), \\\" The decentralised nature of blockchain networks provides a high level of security for smart contracts. Once deployed, smart contracts are protected by the blockchain’s cryptographic algorithms, making them resistant to tampering and unauthorized access. The immutability of the blockchain enforces that once a contract is written and deployed, its terms cannot be altered without network consensus.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Cost Efficiency:\\\"\\n }), \\\" By eliminating intermediaries such as brokers, agents, or legal representatives, smart contracts reduce transaction costs. The automation of processes and the removal of middlemen streamline operations, leading to cost savings for all parties involved. This efficiency is particularly valuable in complex financial transactions, global transactions, and multi-party agreements.\\\"]\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Smart Contracts\",\"description\":\"Self-executing agreements.\",\"difficulty\":1,\"index\":4},\"scope\":{}},\"readingTime\":6},{\"slug\":\"stablecoins\",\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Stablecoins\",\"description\":\"Introduction to stablecoins.\",\"difficulty\":0,\"index\":3,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n li: \\\"li\\\",\\n ol: \\\"ol\\\",\\n p: \\\"p\\\",\\n strong: \\\"strong\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Stablecoins are digital assets that aim to keep their value constant relative to a reference asset, most commonly fiat currencies like the U.S. dollar, euro, or yen. Unlike Bitcoin or Ethereum, whose values can fluctuate significantly, stablecoins are designed to be predictable and stable, making them useful for everyday transactions, remittances, and as a safe haven during market turbulence.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Stablecoins bridge the gap between traditional finance and the crypto world. They allow users to transfer value globally without the fear of price fluctuations. Here are a few key uses:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Remittances\\\"\\n }), \\\": Sending money across borders can be costly and slow. Stablecoins enable faster and cheaper transactions.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"DeFi (Decentralised Finance)\\\"\\n }), \\\": Stablecoins are crucial in the DeFi ecosystem, where they are used for supplying, borrowing, and earning interest.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Hedging\\\"\\n }), \\\": Traders and investors use stablecoins to move out of volatile assets without converting back to fiat.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Payments\\\"\\n }), \\\": Merchants can accept stablecoins for goods and services without worrying about price volatility.\\\"]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"How Do Stablecoins Work?\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Stablecoins achieve stability through various mechanisms:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ol, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Fiat-collateralised Stablecoins\\\"\\n }), \\\": These are backed by reserves of fiat currency held in a bank account. For every stablecoin issued, an equivalent amount of fiat currency is held in reserve. Examples include \\\", _jsx(_components.strong, {\\n children: \\\"Tether (USDT)\\\"\\n }), \\\" and \\\", _jsx(_components.strong, {\\n children: \\\"USD Coin (USDC)\\\"\\n }), \\\".\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Decentralised Stablecoins\\\"\\n }), \\\": These operate without a central authority and are typically issued, redeemed, and governed by smart contracts on a blockchain. Smart contracts can manage the collateral requirements and issuance based on predefined rules in a trustless and transparent process. \\\", _jsx(_components.strong, {\\n children: \\\"Aave’s GHO\\\"\\n }), \\\" is one example of this kind of stablecoin.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [_jsx(_components.strong, {\\n children: \\\"Algorithmic Stablecoins\\\"\\n }), \\\": These rely on smart contracts and algorithms to maintain their peg. Instead of being backed by reserves, these stablecoins use mechanisms like minting and burning to control the supply and stabilize the price.\\\"]\\n }), \\\"\\\\n\\\"]\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Stablecoins\",\"description\":\"Introduction to stablecoins.\",\"difficulty\":0,\"index\":3},\"scope\":{}},\"readingTime\":3},{\"slug\":\"wallets\",\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Crypto Wallets\",\"description\":\"Secure ownership of cryptoassets.\",\"difficulty\":0,\"index\":3,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n a: \\\"a\\\",\\n em: \\\"em\\\",\\n h2: \\\"h2\\\",\\n li: \\\"li\\\",\\n p: \\\"p\\\",\\n ul: \\\"ul\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"In the context of blockchain and cryptocurrencies, wallets are digital tools that enable users to store, send, and receive digital assets securely. These wallets come in different forms—such as hardware wallets, software wallets, and web wallets—each offering a balance between security and convenience. Similar to how browsers serve as your gateway to the internet, wallets serve as your gateway to interacting with web3. Crypto wallets also help you manage permissions with whom you share your data, store cryptocurrency, NFTs, and more.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Self-custody\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"One of the most important features of blockchain wallets is self-custody, where users maintain full control over their private keys. The moment your crypto wallet is created, a unique phrase is generated, known as a “seed phrase” or a “recovery phrase.” You can think of this 12-word phrase as a master password that you need to keep secret and secure. This means that users are the sole custodians of their assets, allowing them to independently verify their balances and transactions without relying on third parties.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Public addresses and private ownership\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"A blockchain wallet consists of two key components: public address and a method of securing ownership (private key or smart contract rules). The public address is what users share to receive assets, functioning similarly to an account number or username in traditional online services. The method of securing ownership, varies depending on the type of wallet. There are two fundamental types of wallets:\\\"\\n }), \\\"\\\\n\\\", _jsxs(_components.ul, {\\n children: [\\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Private key wallets, often referred to \\\", _jsx(_components.em, {\\n children: \\\"EOAs\\\"\\n }), \\\" (externally owned accounts). In this wallet type, the private key is used to sign transactions and verify ownership of the associated wallet.\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.li, {\\n children: [\\\"Smart contract wallets, often referred to as \\\", _jsx(_components.em, {\\n children: \\\"smart accounts\\\"\\n }), \\\". In this wallet type, their ownership rules can be customized through code which enables more complex functionalities such as multi-signature approvals (multisig), batched transactions, and more.\\\"]\\n }), \\\"\\\\n\\\"]\\n }), \\\"\\\\n\\\", _jsxs(_components.p, {\\n children: [\\\"The choice of a wallet and the method used to back up a wallet are important decisions given the irreversible nature of blockchain transactions. To learn more about wallets and explore potential options, you can refer to \\\", _jsx(_components.a, {\\n href: \\\"https://ethereum.org/en/wallets/\\\",\\n children: \\\"this guide\\\"\\n }), \\\" from the Ethereum Foundation.\\\"]\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Crypto Wallets\",\"description\":\"Secure ownership of cryptoassets.\",\"difficulty\":0,\"index\":3},\"scope\":{}},\"readingTime\":4},{\"slug\":\"web3\",\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Web3\",\"description\":\"A new paradigm of digital ownership.\",\"difficulty\":0,\"index\":1,\"mdxSource\":{\"compiledSource\":\"\\\"use strict\\\";\\nconst {Fragment: _Fragment, jsx: _jsx, jsxs: _jsxs} = arguments[0];\\nconst {useMDXComponents: _provideComponents} = arguments[0];\\nfunction _createMdxContent(props) {\\n const _components = {\\n h2: \\\"h2\\\",\\n p: \\\"p\\\",\\n ..._provideComponents(),\\n ...props.components\\n };\\n return _jsxs(_Fragment, {\\n children: [_jsx(_components.h2, {\\n children: \\\"Introduction\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Web3 is the next evolution of the internet where people have control and ownership over their data, the relationships they form online, and their user profile. Together, these make up \\\\\\\"social capital:\\\\\\\" Everyone has it, and it's valuable. In contrast, today when we get on the internet, we go to sites owned by large companies, who own our social capital. These \\\\\\\"web2\\\\\\\" companies like Amazon, Facebook and Google store user data on privately-held servers and sell it to advertisers in exchange for providing free services. This has lead to a good experience for users (free, easy-to-use networks and applications) but has also caused privacy issues, data manipulation, and limited monetisation options. Web3 addresses these issues by using blockchain technology. This technology is based on user ownership. When people own their data, they can monetise however they want, take their digital information with them (profile, content, data) when they switch networks, and it has the benefit of putting people and apps/networks, on an equal footing. Web3 enables a more open and balanced internet, where people have ownership, control, and a stake and a voice in the future of the internet.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"To understand the significant difference between the internet we know today (web2) and web3, take a step back.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"When the internet first came about, it was hard to access because there were no easy-to-use applications. Web1 was built on open, public protocols or applications such as TCP, IP, SMTP, and HTTP that builders could develop on top of, plugging into these protocols to create whatever applications or platforms they wanted. Nobody needed permission to use these foundational protocols or standards to build user-friendly applications like email browsers and marketplaces. These standards are the basic building blocks of the internet. They govern how computers interact with each other and the flow of information. Today, in many senses, we are locked into platforms that own our data.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Web3 is digital ownership\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"The core idea of web3 is to give users ownership of their social capital and spur new innovation. Based on blockchain technology, web3 allows for a multitude of monetisation models and allows builders to create new user experiences and monetisation models that are not necessarily dependent on user data mining and advertisers.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Instead of relying on centralized web2 platforms, web3 enables peer-to-peer exchanges. This approach not only improves security but also creates a more open and fair internet where users have more control over their experiences online. With web3, users can choose to take their social capital (profile, content, relationships and data) to any other web3 platform, so they are not locked into centralized servers and large platforms that control monetisation and their social capital. Web3 blockchain technology is decentralised, meaning data is stored across multiple servers, but user social capital is owned by the user.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Websites or applications that use wallets to manage identity and value are referred to as ‘dApps’ (decentralised apps). DApps run on decentralised blockchain networks rather than traditional servers. One of the key reasons for apps to be decentralized is so that they are more resistant to censorship and technical failures, such as data breaches. This decentralised nature supports a more resilient, fair and balanced online environment, where users are not constrained by large companies that mine and control data and make all governance decisions, whether it is an interest rate or an algorithm.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Web3 is a better option for creators\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Many web2 platforms promise users freedom to earn directly from their fans instead of relying on ad-driven, attention-based monetisation models, but don’t give their creators power over the economics of the platform. Web3 supports more creator-centric models for monetisation and distribution. The content they create on one platform, connected by a wallet identity, can travel with them to other websites. With fungible (non-unique) or non-fungible (one of a kind) tokens, creators have a number of ways to connect with their fan base. Most importantly, creators retain their relationship with their followers and fans if they decide to move to another platform.\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.h2, {\\n children: \\\"Decentralised Finance is a category of Web3\\\"\\n }), \\\"\\\\n\\\", _jsx(_components.p, {\\n children: \\\"Web3 opens up the opportunity for many types of new user experience, networks or user application. One such use use case is decentralised finance, or DeFi. DeFi brings significant advancements to the financial sector, creating greater access as well as enabling faster, more cost-effective, transparent, and secure transactions globally. DeFi protocols or applications like Aave Protocol enable access to financial features or primatives such as supplying cryptographic assets (liquidity) into a market (pool) to earn yield on those assets, and it also enables users to borrow agains their assets in an overcollateralised way without requiring centralized intermediaries. DeFi utilizes 'smart contracts,' or self-executing digital agreements that run on blockchain technology, allowing for trustless execution of transactions. DeFi provides greater transparency, lower costs, and broader access to financial services and as a result, democratizes financial systems, making them available to anyone with an internet connection and cryptographic assets.\\\"\\n })]\\n });\\n}\\nfunction MDXContent(props = {}) {\\n const {wrapper: MDXLayout} = {\\n ..._provideComponents(),\\n ...props.components\\n };\\n return MDXLayout ? _jsx(MDXLayout, {\\n ...props,\\n children: _jsx(_createMdxContent, {\\n ...props\\n })\\n }) : _createMdxContent(props);\\n}\\nreturn {\\n default: MDXContent\\n};\\n\",\"frontmatter\":{\"date\":\"9 Aug, 2024\",\"category\":\"web3\",\"title\":\"Web3\",\"description\":\"A new paradigm of digital ownership.\",\"difficulty\":0,\"index\":1},\"scope\":{}},\"readingTime\":8}]"} |
