Aave is an open source and non-custodial liquidity protocol for earning interest on deposits and borrowing assets. It lets users lend or borrow cryptocurrency without going through a centralized intermediary (like a bank, financial institution, or centralized exchange).
Depositors earn a passive income when they provide liquidity to the market by depositing assets. Borrowers are able to borrow assets to obtain liquidity (working capital) without selling their assets. Borrowers pay interest on their loans. Usually, people borrow due to unexpected expenses, to leverage their holdings or for new investment opportunities.
Polygon is a protocol and a framework for building and connecting Ethereum-compatible blockchain networks. Polygon’s network leverages the security of the Ethereum network and uses Chainlink as a price oracle. It is a scaling solution for Ethereum. Polygon aims to provide faster and cheaper transactions on Ethereum using Layer 2 sidechains, which are blockchains that run alongside the Ethereum main chain.
How to Setup Metamask for Polygon Mainnet
I recommend using Zapper to bridge funds over to Polygon from the Ethereum network.
Aave recently implemented their protocol on the Polygon mainnet, which means that transactions for any Aave Polygon lending or borrowing are lightning fast and have low transaction/gas costs.
Note: Polygon will be paying out 0.5% of the total supply of MATIC in rewards for borrowing and lending funds between Jun. 14, 2021 and Apr. 13, 2022. So you can even get rewarded in WMATIC by borrowing!
Current supported assets: MATIC, DAI, USDC, USDT, WETH, WBTC, AAVE.
How to connect to Aave's Polygon market
Visit their website on the Desktop: https://app.aave.com/markets
Make sure you have Aave's Polygon Market selected (top right of the screen in your web browser).
Click on the connect button.
Make sure you have the Polygon Mainnet selected as your preferred network and connect your wallet.
After you have deposited your assets for lending on the Aave protocol, you can borrow against your deposited assets from the Aave protocol and pay a small interest on the loan.
Navigate to the Borrow tab and select the asset you want to borrow.
For example: clicking into the USDT market will bring up the USDT overview. The maximum loan to value percentage gives you the maximum amount of an asset you can borrow. You can adjust the amount you want to borrow.
Select your interest rate type.
Confirm your transaction.
After your confirm your transactions, you'll be brought to your Dashboard. https://app.aave.com/dashboard/borrowings
In my dashboard you can see that I have borrowed 100 USDT using 446 deposited MATIC as collateral.
Congratulations on successfully borrowing assets from the Aave Polygon market!