Banks are facing stiff competition now. Decentralized Finance (DeFi) is the reason. Which is an acclaimed non-custodial platform that gives loans without intermediaries? It is Aave. Borrowers and lenders can access various services like staking, yield farming, liquidation, and swapping. Are you that entrepreneur keen to revamp the financial system? Develop an Aave clone app.
What are the different revenue streams from an app like Aave?
· Gas Fees - Initially, Aave was functioning on the Ethereum blockchain network. However, now it operates across numerous chains. Hence, both borrowers and depositors have to incur a specific fee while processing transactions. It varies based on the level of congestion on the blockchain network.
· Interest - Prospective debtors need to deposit some collateral before availing of a loan. They can get loans in Ethereum (ETH), DAI (stablecoin), TrueUSD (TUSD), USD Coin (USDC), USDT (Tether), Uniswap (UNI), Binance USD (BUSD), and Yearn.Finance (YFI). Generally, the interest rate is paid in a stable or variable manner per year.
· Arbitrage Trading charges - Borrowers can strategically grow their income by using the arbitrage option. They can avail flash loans, receive a certain amount, and hold it for a certain time in wallets (software and hardware).
Later, they can tap the arbitrage option on an app like Aave. Thus, the reserve amount is transferred automatically into the lending pool. Hence, debtors have to incur a certain fee for performing this task. Moreover, the fees will differ based on the time taken to mint each Ethereum block.
Desiring to change how people manage their money? Create an app like Aave now by joining hands with a DeFi platform development company soon.