MakerDAO’s stablecoin, Aave has introduced a Lido Staked Ethereum, or stETH, earn scheme through Oasis.app, the frontend for borrowing DAI.
Users will be able to borrow Ethereum, or ETH, against their stETH thanks to the new tactic. This has always been feasible by depositing ETH first, borrowing stETH from the Lido protocol, and then lending stETH to another platform, such as Aave, in exchange for more ETH.
According to a press release, however, Oasis will enable users using ETH to engage in the recursive method in a single transaction by utilizing the Aave protocol.
As per DeFi Llama, Aave is the fourth-largest decentralized finance (DeFi) network, with $5 billion in total value locked across numerous lending protocols on Monday. Ethereum accounts for approximately $3.6 billion of the total assets on the Aave network.
More risk is introduced by the recursive stETH/ETH trading technique than by staking or lending alone.
Lido issued a warning to traders in May after the markets experienced a significant swing following the disclosure that the Terra network had twice been suspended as a result of its algorithmic stablecoin dropping to zero.
But according to Aave, the likelihood of it has decreased after the merge, which on September 14 changed the Ethereum network from proof of work to proof of stake.
