This is the process to liquidate the accrued stkAAVE for the benefit of the liquidity providers of the mUSD Savers (imUSD). The stkAAVE is earned from the mUSD bAssets USDC, USDT and sUSD that are deposited into Aave.
High level liquidator contract process:
- Every 10 and a bit days
- all stkAAVE for the mUSD bAssets in Aave (USDC, USDT and sUSD) is claimed to the platform integration contract from Aave’s incentives controller.
- The stkAAVE is transferred from the platform integration contract to the liquidator contract.
- 10 day cooldown of the stkAAVE is initiated.
- After the 10 day cool down
- Redeem AAVE from the stkAAVE to the liquidator contract
- Swap AAVE for USDC using Uniswap V3
- Mint mUSD from the USDC
- Deposit the mUSD into the Savings Manager
- Stream mUSD to Savings Contract (imUSD) over the next 7 days.
This is a snapshot of the amount of stkAAVE that has accrued until 30 June 2021 for the mUSD Savers.
- Aave is no longer rewarding sUSD deposits
- Around 30 stkAAVE is being accrued each week from the USDT and DAI deposits.
- At 231 AAVE, 30 stkAAVE is worth around 7k USDC which provides a 1.7% APY boost to mUSD Savers
- Liquidating all the previously accrued stkAAVE will boost the mUSD saving rate by 25% APY for the week.
- Unlike the COMP liquidation, the amount of stkAAVE that is liquidated each week can not be capped. A change to the liquidator contract would be needed to add this functionality.
The following is a more detailed sequence diagram of the contract interactions in the liquidation process.