Aave is a decentralized, non-custodial lending platform where users can:
- Supply assets to earn interest.
- Borrow assets using collateral.
Lido’s stETH (staked ETH) and wstETH (wrapped stETH) are now integrated into Aave. This allows Lido users to borrow assets while continuing to earn ETH staking rewards.
Aave Versions and Supported Chains
| Version | Supported Assets | Chains |
|---------|------------------|--------|
| Aave V2 | stETH (supply only) | Ethereum |
| Aave V3 | wstETH (lend/borrow) | Ethereum, Optimism, Arbitrum, Polygon |
👉 Explore Aave V3 for wstETH strategies
How to Borrow Against stETH or wstETH
1. Supply
- Deposit stETH (V2) or wstETH (V3) into Aave.
- Your position continues to accrue staking rewards from Lido.
2. Borrow
- Select an asset to borrow (e.g., stablecoins).
- Maintain a healthy Loan-to-Value (LTV) ratio to avoid liquidation.
Done! You’ve now leveraged your stETH/wstETH collateral.
Advanced Strategy: Leveraged Ethereum Staking
Maximize returns by recursively:
- Supplying stETH/wstETH on Aave.
- Borrowing ETH against it.
- Staking borrowed ETH via Lido for additional rewards.
Note:
- Higher gas costs due to multiple transactions.
- Use tools like DeFi Saver for gas-efficient execution.
- Monitor your Health Factor closely.
👉 Optimize your stETH strategy here
FAQs
Do I earn staking rewards when supplying stETH/wstETH on Aave?
Yes!
- stETH (V2): Balance increases daily via Lido’s rebase (~12:30 UTC).
- wstETH (V3): Position value accrues as usual.
Why is Aave’s stETH APY lower than Lido’s APR?
Aave’s APY reflects platform rewards, not Lido’s staking APR. You still earn Lido rewards separately.
Can I borrow stETH on Aave?
No. Only wstETH borrowing is supported (V3).