Aave Credit Delegation
The product resulting from this project would be an "exchange traded token", similar to an ETF in the stock market, that could represent a portfolio of other tokens in similar groupings, such as an index portfolio of the top 10, 25 or 50 cryptocurrency tokens by market capitalization, a portfolio of tokens from a particular industry such as DeFi or privacy or an inverse portfolio of tokens that would act essentially as "puts" on any of the above categories. An algorithm would be written into the token smart contract that would proportionally update the positions within the portfolio based on change in price, token issue leaving the parameters of the portfolio (i.e. in a top 10 portfolio, #10 replaced by #11 because #11 market cap has increased. The portfolios would use a swap exchange/mechanism such as UniSwap to update positions. If a swap exchange is not available for this task, then a centralized exchange may be needed to aid in this re-balancing procedure. In later iterations, fixed income instruments could be created using Aave and tokenized into trade-able portfolios.
How It's Made
The app and token were created with Scaffold_ETH and Scaffold_ETH Lend using Node.js and Yarn, the contracts written in Solidity while riding on a Hardhat local Ethereum node or forked Ethereum mainnet node and later deployed to the Kovan testnet for full functionality. Uniswap is used for swapping tokens to update the exchange token portfolios and Aave Lender is used to earn interest for the fixed income portfolio exchange token.