Hello,
I have been offline for a while from the Aave platform, and I recently noticed that XAUt was finally added. But it seems like I am unable to use it as a collateral to borrow other tokens. I think it is also not possible to borrow XAUt using other tokens as collateral. May be I am missing something, but can someone please tell me the utility of this token in the Aave platform?
Thanks in advance.
Hey Raghuram,
As you can check the risk configurations of XAUt here, you can see the asset is listed in isolation mode, which means you can only borrow stablecoins againts that asset. Also the asset is configured as non-borrowable based on the risk profile of the asset, so you cannot borrow XAUt against other collateral assets.
Hello Harsh, thanks for your reply. So, I just supplied XAUt token, but the amount of stablecoins (USDT or USDC specifically) that I can borrow did not increase. Note that I already have supplied some USDC, so should I remove all the other supplied coins so that the supplied XAUt becomes a collateral for borrowing stablecoins?
I just figured out how to work with the isolation mode. I don’t know the reason for limiting XAUt in the isolation mode, but I found a work-around. I created two wallets. In wallet 1, I deposit XAUt and withdraw USDC (in isolation mode). Then I send this USDC to wallet 2, deposit it there and withdraw WBTC. This is effectively equal to depositing XAUt and borrowing WBTC anyways, but I just need to use two different wallets because of this isolation mode.