In DeFi, liquidity protocols like Aave or Compound allow users to deposit their assets and earn interest. Users can borrow assets using their deposits as collateral and earn passive income by contributing liquidity to the market. In order to protect all the outstanding deposits in the protocol, users may not borrow more than what they have deposited as collateral. Many different collateralization methods exist, including “health factor” on Aave, or “utilization” on Compound.
Those new to DeFi can think of these protocols as a different way to invest money, whether it is fiat (a government-issued currency) or crypto. If you have a bank account, you are likely already participating in similar activities, such as lending and borrowing. Banks issue loans and charge interest, which the borrowers must repay along with the principal loan. In DeFi, users can deposit or borrow. Depositors receive interest on their assets, whereas borrowers must deposit crypto assets as collateral and pay interest to secure the depositors’ investments.
Earn Interest on Zapper
Starting today, it is possible to earn interest from the Zapper dashboard. This is an important new update that will provide users with even more flexibility when managing their assets with Zapper. Users can also complete a weekly “save” quest.
The first liquidity protocol that is supported by Zapper is Aave — keep an eye out for additional integrations to be launched in the coming weeks.
How to Use Aave on Zapper
On Zapper’s save page users can view a list of assets to deposit, reorder the list by Market Size, and filter the list by token. Each asset’s Annual Percentage Yield (APY) is also visible.
Zapper makes it simple to seamlessly exchange any asset for aTokens. On Aave, users must buy the underlying asset before depositing it to Aave to earn interest. On Zapper, users can buy and deposit through Aave with one transaction.
When you have selected the asset that you want to deposit, click “Deposit” to open the transaction window. Process the transaction as usual, ensuring that you complete both steps in the transaction approval, “Approve” and “Confirm.”
Zapper recommends revoking infinite approvals and maintaining the two-step transaction allowance. To learn why, read our guide to revoking token allowances.
New Weekly Quest: Save on Zapper
In addition to launching “save” on Zapper, we are introducing a new weekly quest on the dashboard that aligns with the feature. Users can complete this quest once a week to earn experience points.
Remember, weekly quests will give you experience points, but will likely require a transaction to be submitted on Zapper (on Ethereum, Polygon, or BSC) to complete the quest. Claiming experience points only requires an off-chain signature.
For a refresher on how we have gamified the DeFi experience, learn how Zapper has levelled up.
Getting Started
To get started earning interest on Zapper:
- Sign up at zapper.fi.
- Connect a compatible wallet to your Zapper dashboard.
- Select “Save” from the navigation panel on the left side of the dashboard.
- Enjoy this new addition to the Zapper experience!
