Aave interest bearing USDC

aUSDC

aUSDC is an interest-accruing token that represents a USDC deposit in the Aave lending market.

Risk Rating
Good
$1.00
-0.71%
Summary
What we like
aUSDC is an interest-accruing version of USDC. USDC provides easy on-ramp and off-ramp to convert your USD into digital dollars that are backed 1:1 by underlying reserves.
What we like less
aUSDC is exposed to systemic risk of other assets on the Aave lending platform. USDC is also more centralized as Circle custodies the deposited USD and controls the minting and redemption of USDC.
What it means for you
aUSDC offers you a great way to earn yield on your USD, while maintaining exposure to a highly liquid instrument to hedge your portfolio in volatile market conditions.
Information
Blockchain
  • Ethereum
Info
Key Metrics
  • Fully Diluted Valluation: $594.7M
  • Total Supply: 596,407,271
  • ATH: $1.16 (05/19/2021)
  • ATL: $0.88 (03/11/2023)
Risk Assessment
Good
Asset Strength

aUSDC is a large-cap, fully collateralized asset. This asset depends on a centralized entity for custody services. This asset is exposed to the underlying risks of Aave, a protocol rated as Best in Class. aUSDC is a receipt of a USDC deposit in the Aave lending protocol and accrues interest. The asset has an uncapped supply but has inflation control or burn mechanisms in place.

aUSDC is a stablecoin that usually trades within 20bps of its peg to USD, which makes it a solid store of value.

Asset Volatility

aUSDC is a stablecoin that usually trades within 20bps of its peg to USD, which makes it a solid store of value.

Dependencies

Aave V3

Things to know about aUSDC

Who invented USDC?

USDC launched on the Ethereum mainnet in September 2018 as a partnership between Circle and Coinbase through the co-founding of the CENTRE Consortium. Customers on Coinbase with USD accounts can exchange 1 USDC for 1 USD and vice versa. USDC is issued by financial institutions and established fintech firms that have met its membership criteria.

How does aUSDC work?

aUSDC is a receipt of a USDC deposit in the Aave protocol on Ethereum and accrues interest. USDC is backed 1:1 by USD reserves held with a licensed custodian (Circle). The process of minting USDC tokens involves interacting with CENTRE contracts which manage the minting and burning of USDC. First, a user sends USD to a licensed token issuer's bank account. Second, the issuer uses the USDC smart contract to mint an equivalent amount of USDC. Third, the newly created USDC is sent to the user's on-chain address, while the deposited USD is held in reserve. The process for redeeming USDC for USD is just the reverse process.

How secure is aUSDC?

aUSDC is exposed to the systemic risks of the Aave lending protocol as a default in one asset market can have a contagion effect across the entire platform. USDC is a centralized stablecoin that is perceived as safer and more transparent than USDT as its reserve composition only consists of cash and short-term U.S. government bonds. USDC regularly undergoes audits and publishes monthly reserve reports and attestations that prove the number of USD reserves is greater than the amount of USDC in circulation. Nonetheless, USDC can "blacklist" any of its associated addresses at will. When a USDC address is blacklisted, it can no longer receive USDC and all of the USDC controlled by the address can no longer be transferred on-chain.