Swaap <> Aave collaboration

Introduction to Swaap

Swaap Earn is a yield protocol that provides one-click access to the best DeFi strategies.

Over the past two years, Swaap has been dedicated to building profitable, easy-to-use DeFi yield products:

  • Swaap Maker: a market-making protocol optimized for profitability launched in June 2023.
  • Swaap Earn: a yield protocol that combines sophisticated strategies launched in April 2024.

Our team combines unparalleled expertise in mathematical finance and extensive experience in building scalable applications. Collectively, we bring over 25 years of experience in High-Frequency Trading and 4 PhDs.

Scope of Swaap’s Aave Grant

We received a $20k grant from Aave in March 2024. The funds were used to partially fund audits of Swaap Earn by Chainsecurity and Quantstamp.

The rationale behind this grant is the TVL impact for Aave: $1 deposited in our vaults can generate up to $25 TVL for Aave ($13 in supply volume and $12 in borrowing volume).

Swaap Earn Products

Recursive Restaking Vault

  • Objective: Giving a chance to everyone to leverage their Ether.Fi & Eigenlayer points before the caps are filled.
  • Details:
    • The Swaap Recursive weETH vault allows users to farm EtherFi and Eigenlayer points with up to 13x leverage on Aave.
    • It features automated position management to maximize chances to open a position before caps are filled.
    • weETH supply caps on Aave are getting filled almost instantly. Our automated algorithms maximize your chances to deposit when the caps open.
    • The vault executes the leverage looping and monitors the safety ratio in real-time, adjusting the position if necessary.
    • As Aave uses fundamental oracles, if stETH or weETH face a market price depeg, the position won’t be liquidated. Only a major slashing event, a smart contract bug affecting weETH, or a sustained rate hike on the ETH side would trigger liquidation.
  • Metrics:
    • TVL: ~$500k (around $100k deposited before the cap increase and successfully leveraged)
    • Amount supplied/borrowed on Aave: $1.5m/$1.4m
    • Network: Ethereum mainnet

Yield Vaults

The yield vaults combine Swaap’s edge in market making with the best bluechip strategies in DeFi. More information about the yield vaults can be found here.

ETH

  • Strategy:
    • The vault optimizes ETH yield across a variety of strategies in DeFi:
      • Recursive staking on Aave
      • Lending on Aave
      • Market-making on Swaap Maker with high concentration. The missing asset (e.g., USDC) is borrowed on Aave. Swaap Maker is the market making protocol of Swaap, designed to maximize profitability.
  • Metrics:
    • TVL: ~$1m (cap $1m)
    • 30D APR: 7.7%
    • Amount supplied/borrowed on Aave: $4.4m/$3.4m
    • Networks: Arbitrum

USDC

  • Strategy: 90% of the liquidity is allocated to recursive staking (borrowing ETH against wstETH, swapping it against wstETH and supplying it again). The remaining 10% is allocated to market making on Swaap Maker.
  • Metrics:
    • TVL: ~$600k (cap $1m)
    • 30D APR: 9.6%
    • Amount supplied/borrowed on Aave: $4.4m/$3.4m
    • Networks: Arbitrum

How to Participate

To join, fill out this form to get whitelisted and head to earn.swaap.finance to deposit.

To track our metrics, you can head to earn.swaap.finance. A dune dashboard will also be released soon.

Future Plans

This is just the beginning for Swaap Earn. New vaults and strategies are on the horizon and will be launched soon.

Swaap is proud to build on Aave and looks forward to expanding our partnership.

We are exploring numerous opportunities and would love to hear your thoughts on what you would like to see! Thanks again to Aave Grants DAO for their support

2 Likes

Hey Cyrille, thanks for introducing Swaap and the use of your grant! The three vaults developed under Swaaps Earn Product are an exciting addition to the Aave ecosystem and something we are glad to have supported. AGD can confirm that Swaap received a grant this past March to audit their recursive restaking vault on both Ethereum and Arbitrum.
We look forward to seeing these vaults’ positive impact on the community, especially with features like automated position management and real-time safety ratio monitoring. It’s impressive to see the innovative strategies Swaap employs, such as leveraging EtherFi and Eigenlayer points with up to 13x leverage on Aave and optimizing ETH yield through various strategies.

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