Bounty Question

Create a dashboard that shows:

1. Supply and lending rates for at least five tokens in Aave V2, and
2. Total amount of Wrapped BTC supplied over time. (Provide analysis on the volatility of rates.)
3. Measure the correlation between USDC borrow rates and total wBTC supplied.

Introduction

What Is Aave (AAVE)?

Aave is a decentralized finance protocol that allows people to lend and borrow crypto.

Lenders earn interest by depositing digital assets into specially created liquidity pools. Borrowers can then use their crypto as collateral to take out a flash loan using this liquidity.

Aave (which means “ghost” in Finnish) was originally known as ETHLend when it launched in November 2017, but the rebranding to Aave happened in September 2018. (This helps explain why this token’s ticker is so different from its name!)

AAVE provides holders with discounted fees on the platform, and it also serves as a governance token — giving owners a say in the future development of the protocol. (Source)

Methodology

The following methods are used in this dashboard:

• The flipside_prod_db.aave.market_stats table was used to obtain the supply rates. There is a column in this table titled SUPPLY_RATE, which average values ​​were obtained for 5 tokens WBTC, WETH, USDC, USDT and DAI.
• The flipside_prod_db.aave.market_stats table was used to obtain the lending rates. According to Aave Docs, the result obtained is that multiplying the borrow rate by the utilization rate gives us the desired result. This work was done and the average results were calculated to obtain the lending rate of 5 tokens above.
• The flipside_prod_db.aave.deposits table was used to calculate the total amount of supplied WBTCs. The symbol column with WBTC values ​​was placed in the query condition and also the data of the second version of the Aave protocol was also filtered here (AAVE_VERSION = 'Aave V2').
• To obtain the correlation between USDC borrow rate and total wBTC supplied, first the stable and variable borrow rates of the USDC token were obtained through the flipside_prod_db.aave.market_stats table. Then there was the total amount of WBTC supplied from the previous part and by using the correlation function, the relationship between the total amount of WBTC supplied and each of the barrow rates was obtained. Borrow rates were placed together in a separate graph to show how their changes have been over time.

• What is clearly visible in the two graphs above is that in both parameters examined (i.e. supply rate and lending rate), stable coins have much higher rates than WETH and WBTC tokens. The difference is something like 20-30x for WETH and 60-70x for WBTC. These ratios are more or less repeated in both parameters.
• These rates have no relationship with the supplied amount of each of these tokens. For example, among the three stablecoins in this review, although the rates are largely close to each other, their supply ranges from $15 billion in USDT to $45 billion in DAI.

• More than 14 billion dollars of WBTC have been supplied to Aave version 2 so far. This amount is equal to more than 333k WBTC. This number of WBTC was supplied during 23.3k transactions. This means an average of 14,306 WBTC supplied per transaction!

\

• It can be well seen that the stable borrowing rate has almost always been higher than the variable borrowing rate.
• The trend of both stable and variable graphs are very similar to each other and therefore it is not expected to see a significant difference between the two results in the future results.
• In checking the daily situation, it can be said that there are no similar trends between the graph of WBTC supplied and stable and variable borrow rates. This in itself can be a background that we should expect very few correlations between these binomials.
• But after checking the correlation between them, getting negative results for the correlation seemed interesting. The negative correlation between two parameters, that is, instead of a direct relationship between them (however minimal), it can be said that there is an opposite relationship. It means that the increase of one has been accompanied by the decrease of the other. This negative correlation between the amount of WBTC supplied and borrow rates also existed in the case of DAI and USDT stable coins, but there was a positive correlation in the case of TUSD stable coin. The obtained data tells us that the higher the amount of WBTC supplied, the lower the amount of Borrow rates (although to a very small extent) and this difference is greater in the case of variable borrow rates. (about times more than stable borrow rates)