QiDao Announces Compounding Aave Market Tokens

QiDao Protocol
2 min readJun 24, 2021

What are Aave market tokens (amTokens)?

amTokens are received when users lend out tokens on Aave Polygon. These tokens serve as proof of ownership for the tokens lent out, and earn a return.

Why do you need to compound amTokens?

In order to redeem rewards from Aave for locking tokens on their platform, you have to continuously click on “redeem” on their site. If you want to earn yield on your rewards, you have to deposit the redeemed tokens to Aave through another transaction. The delay between earning rewards and depositing them into Aave causes users to lose yield on their capital. Compounding Aave market tokens (camTokens) automate this process so that users don’t lose on yield.

How does this relate to the QiDao Protocol?

QIP 005 passed the addition of amTokens as collateral for MAI (miMatic), starting with amMatic. The Protocol is offering camTokens so that users can have their collateral grow while it’s held in their vaults. This encourages increasingly healthy vaults and reduces the chances of incurring liquidation penalties.

What’s the motivation for the Protocol to offer this service?

  • Allow users to earn interest on the collateral in their vaults, increasing the protocol’s capital efficiency
  • Tap into the ~$18 billion market on Aave, that could be simultaneously used on the QiDao Protocol
  • Enable amToken holders to borrow on their assets at 0% interest while still earning Matic rewards on Aave

What fees are charged for compounding rewards?

Currently, there are no fees for this service. In the future, the Protocol will charge a small fee to compound amTokens that are not accepted as collateral on MAI vaults.

Start compounding your amTokens here: https://app.mai.finance/yield

If you have any questions or feedback, join our Discord community: https://discord.gg/KFj4cVfbQu.



QiDao Protocol

When I let go of what I am, I become what I might be