The large portion of the Polygon community has been so focused on the “buy the dip” and “Hodling” when in the genuine sense they are missing out on the wealth creation aspect of it. Wealth creation involves making your money work for you. Decentralized finance (DeFi) provides users with unlimited financial instruments that support wealth creation. One of such tools is AAVE, a platform when users can earn and borrow assets.
- Does it involve risk? Yes, it does just like every other investment.
- Is it worth trying? It could help you focus less on finding the right place to sell your assets and Hodl for the long term.
To encourage more users to take part in the wealth creation aspect of DeFi, Polygon and AAVE launched an awareness campaign, “Defiforal” to cement the idea that decentralized finance can be used by anyone regardless of their portfolio size. Polygon also added a $40 million liquidity program to reward users for depositing and borrowing assets on the AAVE platform.
To borrow assets, they require users to make deposits to serve as collateral. Users can borrow 80% of the amount of the deposit as collateral known as Total Value Locked (TVL) on AAVE. So if you intend to borrow $600 you need to deposit $750. When borrowing assets, the user incurs an interest rate on the borrowed amount and the repayment period can often extend to a year and also earn interest for borrowing assets.
The DeFi world on Polygon is a wide space with a lot of options to explore. It would be a loss to miss out on all the good ways to create wealth and increase your portfolio.