2 hours ago
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- Grvt announced a partnership with Aave to allow traders to generate yield on capital deposited to back up their trading positions.
- The DEX also unveiled a mobile app to make perp trading accessible and seamless for users.
- The integration was enabled by Grvt’s stackable yield engine on margin, ONE Balance, and Aave ecosystem protocol TokenLogic.
Privacy-focused DEX platform Grvt has hit on a novel way to put professional traders’ collateral to work, partnering with the DeFi lending protocol Aave to generate yield on the capital deposited to back up their trading positions.
According to an official statement shared with Cryptopolitan, the integration with Aave comes alongside a revamped mobile application that’s designed to streamline the perps trading experience and make it simpler for traders to manage their positions.
Professional traders engage in perpetual futures as a way of maximizing their capital through leverage. With perps, they can control a much larger position with minimal collateral and speculate on the market moving in either direction without worrying about expiring contracts.
But the downside of perps is that the capital deposited as collateral to maintain trader’s positions is non-productive – it just sits there doing nothing, until the contract is closed.
Grvt’s integration with Aave comes as the decentralized finance protocol has already surpassed $1 trillion in cumulative lending volume throughout its lifetime.
Grvt’s productivity push
By integrating with Aave, Grvt says it’s giving traders a way to make that capital work harder. In addition to maintaining traders’ open positions in the futures market, it can now simultaneously be used to generate sustainable on-chain yield via Aave’s lending platform, enhancing capital efficiency for every perps trader.
In this way, it eliminates one of the major opportunity costs for DeFi users. Traders deposit their collateral on Grvt, open a long or short position, and for as long as that contract remains open, their funds will generate a consistent return. Win or lose, traders won’t go home empty-handed.
Aave Labs founder and Chief Executive Stani Kulechov said traders are letting opportunities get away from them when their stablecoins aren’t earning yield. “This integration lets Grvt users earn on their collateral while they trade, a major capital efficiency improvement,” he said. “We’re excited to see Grvt integrate Aave to the benefit of its users.”
Grvt said it has carefully reviewed the DeFi industry for publicly disclosed integrations similar to this one, and hasn’t found anything like what it’s offering. In other words, it has become the first perpetual DEX platform to embed a reliable yield source in this way, giving investors a way to earn a little extra while they’re engaged in trading.
The payoff is not inconsequential. According to Grvt, users can earn a yield of up to 11%, depending on the prevailing conditions in Aave’s stablecoin lending markets. For professional traders who often deposit substantial value as collateral and maintain open positions for weeks on end, the potential returns can be significant.
Grvt CEO Hong Yea said most of the DEX’s competitors have been focused on providing utility, expanding the number of markets available to give traders more options on how to put their capital to work. That’s important, of course, but so is capital efficiency.
“We are focused on the second, equally critical dimension: productivity,” he stressed. “By embedding Aave’s yield-bearing infrastructure directly into our trading engine, we are fundamentally increasing the intrinsic value of every dollar deposited on Grvt.”
Accelerating institutional DeFi
With Grvt’s newly redesigned mobile app, Yea believes that traders are in a better position than ever before to maximize their earnings potential. The app features a new interface that aims to make navigation easier and faster, providing greater visibility into users’ portfolios and enhanced risk management controls.
He said users should find that it’s much easier to monitor their open positions and manage orders, alleviating some of the stress experienced during busy, volatile market conditions.
The integration with Aave was enabled by Grvt’s stackable yield engine on margin, called ONE Balance, which enhances the flexibility of collateral deposits. Aave ecosystem protocol TokenLogic is a key enabler too, helping to optimize the deployed collateral behind the scenes and maximize its yield-generating potential without adding to the complexity.
More significant is how the integration furthers Grvt’s ambitions to become the nerve center of institutional DeFi, by leveraging ZKsync’s recent Atlas upgrade to unite the Ethereum ecosystem’s fragmented liquidity.
ZKsync Atlas provides sub-second finality for Layer-2 to Layer-2 transactions and settlement in just 15 minutes when sending funds to or from the Ethereum base chain to any L2 network. It enables idle capital on Ethereum and L2s to be used as collateral on Grvt because of the way it eliminates delays when positions are updated or liquidated.
ZKsync enables Grvt’s interoperability with Aave, making that capital become even more productive, as it can simultaneously earn competitive rewards while backing open positions. With a single update, Grvt has dramatically enhanced capital flexibility and efficiency across the Ethereum ecosystem, making it even more appealing for institutional investors.
Aave recently surpassed $1 trillion in cumulative lending volume, becoming the only lending protocol to reach that milestone. The protocol remains the leader across multiple metrics, including almost $27 billion in total value locked (TVL) currently.
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