Time for another breakdown on how to participate in DeFi for beginners. With the giant Arbitrum airdrop coming this Friday you bet we are doing this on Arbitrum.

Let’s add some liquidity to @AaveAave!

Aave is a liquidity market where users can supply and barrow liquidity, real simple. I highly recommend reading their FAQ in order to get a deeper understanding of what Aave does.

Important to note that it’s governed by the community with a DAO and is one of the most successful DAOs we have in DeFi. Currently holding a 139 million treasury.

Interacting with AAVE TLDR:

1. Supplier deposits asset and earns yield for doing so

2. Supplier can now borrow against their deposits, the borrowed amount slowly increase relative to the interest rate

We will just be Supplying liquidity in this article however. Talking about borrowing deserves a dedicated article.

Bridging ETH to Arbitrum:

1. Go to Zapper.xyz website

2. Connect your wallet

3. Click on "Bridge"

4. Select "Transfer from Ethereum" and "Transfer to Arbitrum"

5. Select ETH for both "You Send" and "You receive" inputs

6. Review order and submit the transaction to send ETH to the L2 network

Switch to Arbitrum network

1. Click on network icon in upper right corner of Zapper

2. Select the Arbitrum network from the modal

3. The connected wallet will then prompt you to switch networks

4. Confirm within your wallet and get ready to navigate to the Aave website

Navigate to Aave:

1. Select "DeFi" in the side navigation menu

2. Confirm Arbitrum is selected within the network switcher

3. Search for Aave v3 and click on the App

Then look for the link icon and click the icon. This takes you to the official Aave website, always good practice to use official sources of truth when navigating to DeFi apps. Even sponsored posts on google can lead to scam website!

Navigate to the DeFi app:

1. Take your time and read through the Aave landing page

2. Top of the page click on "Launch App"

3. This sends you to your Aave dashboard

Connect your wallet.

Here you can see all assets in your wallet that can be supplied to Aave.

Notice you will see the ETH you bridged over to Arbitrum in the "Assets to supply" section.

ETH at the time of writing this has a 1.2% APY. Different assets will have different APY, all depends on the borrowing demand. More borrowers = higher APY for suppliers

Find other assets to supply by navigating to the “Markets” page. But we are only supplying ETH in this article so navigate back to the “Dashboard” page.

Supply ETH:

1. Click on “Supply”

2. Enter amount of ETH you want to supply

3. Click "Supply ETH" and confirm transactions in the connected wallet

Once the transaction is complete Aave will show a confirmation!

Also because this transaction is being done on Arbitrum it only cost $0.20 to deposit. Makes making smaller moves within DeFi much easier. You don’t need to be a whale in order to participate in DeFi.
That's it! As time goes on your account will earn yield on the supplied ETH.

Aave is one of the DeFi cornerstones, so from a risk standpoint it's one of the least risky actions you can take in DeFi. It’s actually the foundation for other DeFi apps who build on top of Aave, but that’s for another article.