Fee Metrics Analysis
In this dashboard, we will visualize fees generated from Deposits, Flash Loans, liquidations, liquidity mining distribution, and staking fees on different versions like Aave V1, Aave V2, Aave AMM and Aave on Polygon for any given week in the past one year.
Aave is a decentralized finance protocol that allows people to lend and borrow crypto, where in Lenders earn interest by depositing digital assets into specially created liquidity pools. Borrowers can then use their crypto as collateral to take out a flash loan using this liquidity.
AAVE is the Ethereum token that powers Aave protocol, a decentralized non-custodial money market protocol where users can participate as depositors or borrowers.
Aave generally provides liquidity in the form of short term loans, stable return on capital, and relatively low risk. Users deposit digital assets into "liquidity pools," which become funds that the protocol can lend out.
Flash loans are a type of uncollateralized lending that have become very popular in decentralized finance (DeFi), which can be used across decentralized finance protocols based on the Ethereum network, and more recently on Binance Chain.
Users deposit digital assets into liquidity pools, which become funds that the protocol can lend out and below graph shows the fees generated on Aave deposits over the past one year, across multiple versions Aave V1, Aave V2, Aave AMM..
Below graph shows the Total fees generated in USD currency for Aave deposits transactions happened over the past one year, across multiple versions Aave V1, Aave V2, Aave AMM..
Users are able to borrow money with Flash Loans without posting collateral due to their atomicity. A couple of caveats should be discussed. Whenever you borrow an asset through a Flash Loan, you have to pay a fee of 0.09% of the amount lent. In addition, you must repay the loan in the same transaction in which you borrowed it.
The below chart shows the Total fees generated on Aave Flashloan transactions happened in the last one year, across multiple versions Aave V1, Aave V2, Aave AMM..
Here is the graph that shows the daily Transactions fees generated on Aave Flashloan transactions happened in the last one year, across multiple versions Aave V1, Aave V2, Aave AMM..
The below chart shows the Average Transaction fees generated on Aave Liquidation transactions happened in the last one year, across multiple versions Aave V1, Aave V2, Aave AMM..
Aave's Liquidation is a process that occurs when a borrower's health factor goes below 1 due to their collateral value not properly covering their loan/debt value. This may occur when the collateral decreases in value or the borrowed debt increases in value.
A liquidation repays up to 50% of a borrower's debt, plus a liquidation fee, which is taken from the collateral available, so after a liquidation you are repaid the amount you liquidated from your debt.
AAVE can also be staked for insurance to earn protocol fees and AAVE rewards. Here is the graph that shows the staking fees on Aave's transactions over the past one year, across multiple versions Aave V1, Aave V2, Aave AMM..
Using the AAVE token on the blockchain network, users who submit AAVE as collateral receives a discount on transaction fees, while users that borrow AAVE are not charged a fee.
From the above graphs and visualizations, we can see the fees generated on Aave deposits, flash loans, Liquidations etc are following a consistent trend over the past one year on different versions Aave V1, Aave V2, Aave AMM..