In October 2020, when we first introduced aETH — our synthetic bond asset enabling liquidity for ETH stakers — the “DeFi summer” was just beginning. Since then, the sector continued to grow rapidly, turning into a $60+ billion market. Over that period, aETH’s role was expanding as well, as we proceeded to add more yield opportunities and use cases for the asset. This article explores liquidity farming opportunities for aETH holders.
What is aETH
aETH is a synthetic reward bearing bond asset that enables instant liquidity for the Ethereum 2.0 network. It represents the staked ETH plus all future staking rewards.
At the start in December 2020, aETH was issued at a ratio of 1:1 to the amount of ETH staked. Over time, 1 aETH is expected to grow in ETH value, as it contains the principal stake plus staking rewards.
aETH allows users to stake Eth2 and redeem rewards before the phase 1.5 goes live and the lockup period ends (which can take up to several years).
Another important use case for aETH is liquidity farming. aETH holders can provide liquidity to aETH-supporting pools on decentralized exchange platforms (DEXes) and earn from transaction fees.
How aETH liquidity farming works
aETH holders are rewarded for providing liquidity on DEXes for any pools supporting the asset. For instance, if there’s an aETH/ETH pair listed, aETH holders can lock up their holdings (along with the proportional amount in ETH). In return, you get a liquidity token, which you can then stake on the same platform and harvest rewards, earning a commission on trades involving the assets you’ve deposited to the pool.
Please note that liquidity contains certain risks, as there is a good chance that you might experience impermanent loss, along with exploitation risks. Please do your own research on liquidity/yield farming before taking any action.
Below is the list of DEXes supporting aETH-enabled pools:
The full list of decentralized exchanges with aETH pools
As aETH holder, you can provide liquidity to the following pairs on Uniswap: Eth/aETH, USDC/aETH, DAI/aETH.
To get started, follow these simple steps:
- Go to Go to https://uniswap.exchange/pool and connect to your wallet
- Select the relevant aETH pool
- Enter the amount you want to add to the liquidity pool and confirm
As soon as the transaction is confirmed in your MetaMask wallet, you will become a liquidity provider and receive the relevant LP token.
You can earn $SUSHI by adding liquidity to aETH/ ETH and aETH/ USDT pools on SushiSwap.
- Go to https://exchange.sushiswapclassic.org/#/pool and select the aETH token pair you want to add liquidity to
- Fill in the amounts you want to add and click “Supply”
- After you approve the transaction, you will receive Sushiswap LP tokens in your wallet representing the share you have deposited in the aETH pool.
You can also receive become an aETH liquidity provider on the following DEXes:
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