> For the complete documentation index, see [llms.txt](https://docs.tren.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tren.finance/get-started/what-is-tren-finance/money-market-deposits.md). # Money Market Deposits 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](/protocol/hooks.md) 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](/protocol/hooks.md), 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](https://app.compound.finance).