Increment Receives Grant from Aave to Enable Multi-Currency Yield for aToken Holders
Aave is a leading DeFi protocol with an all time high TVL of $33 billion
Aave is a decentralized non-custodial liquidity market protocol where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers are able to borrow in an overcollateralized (perpetually) or undercollateralized (one-block liquidity) fashion.
With an all time high TVL (Total Value Locked) of $33 billion according to DeFi Lama, Aave is one of the leading DeFi protocols in the crypto universe. As Aave continues to create groundbreaking tech and push the boundaries of Web3, a fundamental utility of the protocol does not change - the ability to earn passive income for depositors. Stablecoins like USDC, DAI, and USDT are amongst the most popular because like the name suggests, the coin is pegged to the US dollar and remains relatively stable. Thus, many DeFi players are comfortable holding these stablecoins to secure the yield that they earn.
However, a major challenge arises for those who live outside the U.S., as the yields of stablecoins can be negatively affected by currency fluctuations.
Changing this is our mission.
Increment is a distributed algorithmic exchange rate protocol built on zkSync 2.0, empowering open finance for non-USD participants in DeFi. In V1 of the Increment protocol, we introduce multi-currency perpetual swaps where traders can long or short global exchange rates and liquidity providers can earn trading fees in exchange for depositing funds to secure liquidity.
By using Increment’s global exchange rate perpetual swaps, you can turn your yield on Aave into any currency of your choice. For instance, if your native currency is the Euro, you can open a long position on the Euro-Dollar Perpetual with your aUSDC - which is still earning yield on Aave and receive a profit when the Euro strengthens (plus or minus funding payments), thus hedging your USD exposure.
As we bring Increment to market, we hope our protocol will immensely benefit and create more utility for aToken holders as well as the Aave community. Not only will Increment provide aToken holders with the ability to hedge and secure their yield opportunity, but it also opens a new realm of utilities for aTokens, such as diversifying their DeFi portfolio, earning additional passive income, or participating in arbitrage opportunities.
We would like to thank the Aave Grants DAO for their support. We are excited for what’s to come and will continue to keep the community updated on our progress!
Increment is a decentralized, algorithmic perpetual swaps protocol building on zkSync 2.0, featuring automatically concentrated liquidity, dynamic fees and parametrizable pools.
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