Aave Interest-Bearing LINK (aLINK) Primer
What is aLINK?
TL;DR: aLINK is a token you receive from the Aave lending platform that represents the LINK you’ve deposited and the interest you have earned on it.
You may be familiar with Aave, a DeFi lending protocol that allows you to lend and borrow across a wide range of digital assets using both variable and stable interest rates. One such asset that can be deposited for collateral is Chainlink (LINK)!
When you supply capital to Aave, you will receive a token in exchange that denotes your pro-rate claim on the underlying capital pool. In other words, these “aTokens” tell the protocol how much of that token you have deposited and how much you can later withdraw from the pool.
As you may know, when you deposit assets such as LINK on Aave’s protocol, it is lent out to borrowers who pay interest on those loans. That interest is then paid out to you, the depositor. The other special property of aTokens is that they always retain a value equivalent to the underlying asset. As you gain interest on the tokens you’ve deposited, the number of aTokens in your wallet will actually change to reflect that!
Here’s quick example:
You deposit 10 LINK worth $100 into Aave, and receive 10 aLINK tokens in return.
After some time, you earn $10 of interest on your LINK. Assuming 1 LINK = $10, the number of aLINK tokens in your wallet will increase to 10.1, meaning your stake is now worth $110! Pretty cool!
How can I obtain aLINK?
The following steps will take your through how to make a LINK deposit through Aave to receive aLINK.
- Go to Aave’s lending platform. Select and connect your wallet provider. We recommend Metamask.
- Select “Chainlink” in the list of available assets and click “Deposit” on the next screen.
You should be directed to a screen asking you how much you want to deposit. Input the amount desired, and click “Continue”.
If this is your first time depositing this asset on Aave, you will have to complete an approval transaction. Click submit on both transactions (“Approve” and “Deposit”). You will get a pop-up from your wallet provider. Approve all transactions and wait for them to settle.
- Congratulations! You should now have aLINK in your wallet! Over time, you will notice the number of aLINK increase in your wallet to reflect interest earned on LINK deposited on the Aave platform. To withdraw, simply click the “withdraw” button the main asset screen.
Next, check out Pool 3 aLINK-specific instructions to deploy them and start earning more YFLs!!