71% APY on lending ETH on Aave

Today is merge day, and right now Aave is yielding 71% APY to ETH lenders. Is this simply a reflection of how many people are trying to borrow ETH (to capture ETHPoW after the merge), or is this more of an indication of the risk of having ETH in Aave through the merge?

I’m skeptical of the value/viability of ETHPoW so I’m happy to capture a huge APY (even if only for a day, I’m sure it will drop significantly tomorrow) and miss out on some ETHPoW. That said, is there any real risk of losing the ETH that I supplied to Aave through the merge? Should I consider closing my position and flipping that ‘collateral’ toggle to reduce risk?

What are people here doing with their positions in Aave (or other lending platforms for that matter)?

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6 thoughts on “71% APY on lending ETH on Aave”

  1. Merge happens in 11 hours, so 71% APY only represents a cost of $2 per borrowed ETH. Doing so will basically let you claim a free ETHPOW on the fired chain for every ETH borrow. ETHPOW futures are currently trading at $16 on Bitxmex, so overall it’s more than worth it to run this strategy assuming you’re reasonably confident about finding liquidity to quickly dump the ETHPOW.

  2. I use Atlantis on BSC. 100% of ETH is borrowed. Borrow rate is 100% and the lend rate 81%. Stablecoin borrows are also at the lowest I’ve seen on the platform. Guess people returning everything they possibly can to borrow ETH.


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