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- Aave has launched a staked Ethereum Earn Strategy through Oasis.
- The Oasis allows its users that own ETH to get into a recursive stETH or ETH strategy.
- The whole process completes in a single transaction with the help of Aave protocol.
Aave, a decentralized lending protocol, launched a Lido Staked Ethereum or stETH earn strategy with the help of Oasis.app, the frontend for adopting DAI is the stablecoin of MakerDAO.
The fourth largest DeFi platform is accounting for $5 Billion worth of total value locked across various lending protocols on October 24, 2022, as sourced by DeFi Llama. It can be seen that around $3.6 Billion worth of the assets on the Aave platform are in the form of Ethereum.
Aave’s Crypto Staking Strategy
The new strategy introduced by Aave, permits users to take over Ethereum, or ETH, against their stETH. It is made up capable to do that by firstly depositing ETH and borrowing stETH from the Lido protocol, after that going to another platform, like Aave, and loan stETH in exchange for ETH again. But now, Oasis will let users with ETH get into the recursive strategy in just a single transaction by using the Aave protocol.
The algorithmic stETH trading strategy somewhere introduces more risks than just staking or lending solely.
On the other hand, Oasis.app posted on October 24, 2022 about the launch of AAVE stETH/ETH ear strategy in the twitter thread. Oasis also mentioned that the strategy is based on getting extra exposure to the returns of LidoFinance stETH.
Crypto Revision
When the crypto industry got into a huge swing over the news of Terra network that it stopped twice following its algorithmic stablecoin plumping to zero, in May 2022. Additionally, Lido warned the traders as they were at a massive risk of having their collateral liquidated.
In the response, Aave stated that the risk of that happening has been reduced after the merge, which switched the Ethereum network from proof of work (PoW) to proof of stake (PoS) on September 14, 2022.
In addition, the Founder and CEO of Aave, Stani Kulechov, expressed in a recent podcast interview that the risks will fall even more after the Ethereum core developers carry out the Shanghai upgrade, to make it so the staked ETH can be unstaked. As presently, staked ETH can’t be withdrawn.
As Kulechov stated “But at the same time, when you are composing things, you’re always adding risk. So that’s something that needs to be acknowledged. And I think that’s something that is missing at the moment is how do you distinguish and how do you understand the compounding risks involved.”
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
