Aave

Assist with Aave lending, borrowing, liquidations, and risk management across chains.

Security Scan

This is an instruction-only, informational skill about Aave (lending/borrowing/liquidation) with no installs, credentials, or file access requested — its declared capabilities match its contents.

Purpose & Capability

Name/description match the SKILL.md content: the file provides high-level explanations and risk-management guidance for Aave across chains. The skill does not request unrelated resources, binaries, or credentials.

Instruction Scope

SKILL.md is purely educational and prescriptive (concepts, formulas, best practices). It contains no commands, API calls, file paths, or instructions to read environment variables or local data. It does mention automation and integrations at a high level but provides no code or steps that would access secrets or perform transactions.

Install Mechanism

No install spec and no code files — instruction-only skills are lowest risk because nothing is written to disk or downloaded.

Credentials

The skill declares no required environment variables, credentials, or config paths. There is no disproportionate credential request relative to the stated purpose.

Persistence & Privilege

always is false and the skill does not request persistent or elevated privileges. Model invocation is enabled (the platform default), but that is not combined with other risky requests here.

Assessment

This skill is informational-only about Aave and does not request keys, install software, or run commands — low-risk. Before relying on any on-chain actions you should: never share private keys or seed phrases with a skill, verify contract addresses and network (mainnet vs testnet), and if you want the agent to execute transactions expect additional code/credentials (wallet/RPC) which should be scrutinized. Because the agent can be invoked autonomously by default, only enable the skill if you are comfortable with it providing advice automatically; for executing transactions, prefer explicit manual operations and limit credentials to a dedicated, minimal-privilege wallet.

Core Concepts

• Supply assets to earn interest — deposit, receive aTokens representing position
• Borrow against collateral — must supply first, then borrow up to limit
• aTokens accrue interest — balance grows over time automatically
• Health Factor determines liquidation risk — below 1.0 = liquidation
• Variable and stable rates available — stable costs more but predictable

Health Factor (Critical)

• Health Factor = (Collateral × Liquidation Threshold) / Borrowed
• Above 1.0 is safe — higher is safer
• At 1.0, liquidation begins — partial position closed
• Monitor actively during volatility — prices move, health factor changes
• Add collateral or repay debt to improve — before liquidation happens

Supplying (Lending)

• Deposit supported assets — ETH, stablecoins, various tokens
• Receive aTokens 1:1 — aETH, aUSDC, etc.
• Interest accrues in real-time — aToken balance grows
• Can withdraw anytime if liquidity available — high utilization may block withdrawals
• Enable as collateral to borrow against — optional per asset

Borrowing

• Must have collateral supplied first — can't borrow without
• Borrow up to LTV (Loan-to-Value) ratio — varies by asset, usually 70-85%
• Interest accrues on borrowed amount — must repay more than borrowed
• Variable rate changes with market — stable rate fixed but higher
• Debt tokens represent borrowing — not transferable

Liquidations

• Triggered when Health Factor < 1 — automated, permissionless
• Liquidators repay portion of debt — receive collateral + bonus
• Liquidation penalty 5-10% — you lose this bonus amount
• Up to 50% of debt liquidated at once — may need multiple liquidations
• Prevention: monitor and manage HF actively

Multi-Chain Deployment

• Aave V3 on Ethereum, Polygon, Arbitrum, Optimism, Avalanche, more
• Same interface, different markets — assets and rates differ
• Bridged assets may differ — USDC vs USDC.e
• Portals enable cross-chain — supply on one chain, borrow on another

E-Mode (Efficiency Mode)

• Higher LTV for correlated assets — stablecoins to stablecoins, ETH to stETH
• Up to 97% LTV in E-Mode — vs ~80% normally
• Only borrow assets in same E-Mode category — restricted but efficient
• Higher liquidation risk — narrow margin, monitor closely

GHO Stablecoin

• Aave's native stablecoin — minted by borrowing
• Backed by Aave collateral — overcollateralized
• Interest paid to Aave DAO — different from regular borrowing
• stkAAVE holders get discount — reduced borrow rate

AAVE Token

• Governance token — vote on proposals
• Staking in Safety Module — earn rewards, risk of slashing in shortfall
• stkAAVE for staking — represents staked position
• 10-day cooldown to unstake — plus 2-day unstake window

Risk Management

• Don't max out borrowing — leave buffer for price movements
• Diversify collateral — single asset concentration increases risk
• Use stablecoins for lower volatility — stable collateral = stable HF
• Set alerts for Health Factor — services like DefiSaver
• Consider automation — automatic deleveraging tools

Common Mistakes

• Borrowing at max LTV — immediate liquidation risk
• Ignoring variable rate changes — rates can spike quickly
• Not monitoring during volatility — HF changes fast with price
• Supplying without enabling collateral — can't borrow if not enabled
• Forgetting about interest — debt grows over time

Gas Considerations

• Approvals needed for each new asset — first-time gas cost
• Supply and borrow are separate transactions — plan gas for both
• L2 deployments much cheaper — Arbitrum, Optimism save significantly
• Batch operations where possible — some aggregators help

Integrations

• DefiSaver for automation — auto-repay, auto-leverage
• Instadapp for advanced management — DeFi dashboard
• 1inch, Paraswap for swaps — swap and supply in one transaction
• Flash loans for advanced users — borrow without collateral, repay in same tx