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Reserve Reports: What is the AAVE Protocol and how does it relate to our collaterals?

If you have looked at our Reserve Reports, you may have seen tokens deposited in the AAVE Protocol, such as aAvaDAI or aOptUSDC. If you didn’t know what they were or how they work, you’ve come to the right article to fully understand our collaterals and the Protocol we operate with.

Reserve Reports: What is the AAVE Protocol and how does it relate to our collaterals? - Num Finance

Reserves Report and Transparency 

Transparency is one of our core values at Num Finance and a key component in earning the trust of our users. That’s why we strive to provide the community with as many tools as possible to investigate and understand how our project operates. Each month, we publish our Reserves Reports, a document that primarily details the circulating tokens and their respective collaterals.

Reserve Reports help to understand the balances of nuARS and nuPEN. In general, they show the minted tokens, minted tokens that haven’t been issued, and issued tokens. They also report the collaterals that back the circulating tokens and the wallets where they are held. These collaterals can be different cryptocurrencies, across various chains, and, in many cases, tokens called “deposit certificates” in AAVE, the safest decentralized and non-custodial liquidity protocol currently available.

AAVE Protocol and Deposit Certificates

AAVE is a decentralized and non-custodial liquidity protocol that allows users to borrow and lend funds, and operates on the Ethereum blockchain. The platform enables users to perform these operations securely and without the involvement of a third party, using a system of variable interest rates. Depositors provide liquidity to the market to earn a passive income, while borrowers can borrow in various modalities.

AAVE Protocol - Num Finance

AAVE’s “Deposit Certificates” are a way to represent the deposit made by a user on the AAVE platform, i.e., when a user deposits, they lock their cryptocurrencies and provide liquidity. Depositors receive a proportionate share of the interest paid by borrowers. Each cryptocurrency has its own special certificate. For example, aDAI (Aave DAI) is the deposit certificate for DAI on the platform, while aUSDC serves the same function for USDC deposits. These operations can also be performed on different chains:

aAvaUSDC (Aave Avalanche USDC) es el Certificado de Aave de USDC desplegado sobre Avalanche y aOptUSDC es el certificado de depósito de USDC en la chain de Optimism. Estos son solo algunos de los ejemplos.

aAvaUSDC (Aave Avalanche USDC) is the Aave certificate for USDC deployed on Avalanche, and aOptUSDC is the deposit certificate for USDC on the Optimism chain. These are just a few examples.

It’s important to note that each deposit certificate is an independent entity with its own liquidity and interest rates. This means that, for example, aOptDAI may have a different interest rate than aAvaDAI, even if both are deposit certificates for the same cryptocurrency.

In the case of Num Finance, users can see in the Reserve Reports that some of the collaterals are deposited in AAVE. In the latest report, collateral is shown in aAvaDAI and aAvaUSDC. It’s important for users to understand the information we provide for a better understanding of the project and to make informed decisions based on it.

Colaterales - Num Finance
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