At Summer.fi we want to be the most trusted place to deploy your capital in DeFi. As yet, we have only been supporting Maker collateral and stETH strategies on AAVE.
We are now expanding our multi-protocol offer, starting with Multiply functionality through AAVE for ETH, wBTC and stETH. This new Multiply offering will use the same beloved interface, with AAVE as the underlying protocol.
The power of Summer.fi Multiply
Summer Multiply for AAVE is a product that allows you to immediately utilize your borrowed USDC to buy more collateral within Summer.fi. The starting supported collaterals are the most demanded in the market, ETH, WBTC and stETH, and we will continue to add the best and safest AAVE supported collaterals.
This means that you can increase or decrease your exposure to a single asset without having to perform multiple transactions or go to other apps to exchange.
What can you do?
With this new protocol for Multiply, you can select to increase your exposure to wBTC,ETH and stETH in the same way as you do with Multiply for Maker.
A user can enter a position with any of the supported collateral, select the multiplier, and open a long position with just a couple of clicks without leaving Summer.fi.
After creating your position, you are able to increase or decrease your risk, or multiplier, without the need to deposit or withdraw more collateral. If you want to finally exit your position, you can close your position to USDC.
With AAVE you can access higher multiples, and, since your collateral is available for borrowing, you will get yield on it. This yield will be counted against your borrowing rate. This means that in many cases your net borrowing cost will be lower compared to Maker. Each protocol has its own advantages, which you can review here.
How does it work?
When you open a new position you will select a collateral and a Loan to Value (LTV) according to your desired risk and reward, and in a single transaction, Summer.fi will deposit your collateral to AAVE, borrow USDC and purchase more collateral with it, depositing it back into the protocol.
This way, you will obtain increased exposure to your assets against USDC.
When you start using Summer.fi you will be asked to first create a Smart DeFi Account, similar to the DSProxy contracts created to manage Maker vaults. Once this transaction is confirmed, you will be able to deploy your capital with ease. You can use your Smart DeFi Account as long as you need, and thi is always going to be on the Ethereum blockchain. You only need a single Smart DeFi Account to start using Summer.fi and its features, but you are not limited to one.
A powerful feature of Smart DeFi Accounts is that for protocols like AAVE you can manage more than one position from a single wallet by creating multiple Smart DeFi Accounts. All details about the Smart DeFi Account can be found in our Knowledge Base article.
What are the costs?
Summer.fi charges a fee per Multiply action of 0.2% over the required swap.
Your Multiply position will pay a variable borrowing fee to AAVE and will get paid a variable lending fee for providing liquidity to AAVE. You can see this in your 'Net Borrowing Cost' in the main view. Ethereum gas fees will apply, with the value dependent on the network conditions.
What are the risks?
With Multiply products, as your exposure increases, so are the risks. Liquidation risks are higher in Multiply positions, so you must monitor them to ensure your LTV is within healthy limits. Even if AAVE and Summer.fi are battle-tested apps, smart contract risk is always present. You can check our Knowledge Base for further details.
We aim to keep providing the best user experience for AAVE with more features incoming, including automations, more supported assets and Borrow. Not only that, we have also all been waiting for AAVE V3 to deploy on Ethereum mainnet, and we are excited to see the new opportunities and features in the protocol. As it develops and gains traction, we will integrate V3 into Summer.fi too. Stay tuned as 2023 has only just started and we can't wait to share what we have planned!
If you have any questions regarding Summer.fi in general, you contact us at firstname.lastname@example.org or on our social media.