Money Market Deposits

Unlock liquidity in your deposit tokens

This strategy utilizes idle liquidity in the form of deposit tokens for additional liquidity at a low cost, or for enhancing yield. For this example, we'll use Aave's aWETH token, but it can also be applied to lending protocol deposit tokens such as Compound.

Gain Additional Liquidity at a Lower Cost with XY

The AAVE deposit strategy showcases the potential for cost reduction in borrowing:

1. Users deposit ETH into AAVE, earning base yield (currently ~2% APY)

2. The resulting aWETH is deposited and used as collateral in Tren Finance's isolated module

3. Users can borrow XY at significantly reduced rates (1% vs AAVE's 9.27% on GHO)

4. Use XY as you would any stablecoin, including:

   1. Buy / long another asset

   2. Short the underlying deposit token to achieve delta neutral positioning; earn the deposit APY from Aave + funding rate yield on the short position

Multiply Yield on Deposit Tokens

1. Deposit ETH on Aave to receive aWETH deposit tokens

2. Collateralize the resulting aWETH in Tren's isolated module

3. Gain leverage through Tren Finance's Hooks
4. Rewards can automatically be compounded for you

5. Gain leverage, transforming 2% base APY into significantly higher yields

Additional Benefits

• Tren Finance generally offers higher LTV rates compared to money markets like Aave, allowing for greater capital efficiency

• Through Hooks, users can loop their deposit tokens using Tren Finance and repaying back their debt using collateral, something that isn't natively possible on money markets like Compound.