DeFi Saver has been around for a long time and many are familiar with it. However some new users have asked how they can start using it, as they may not be familiar with the interface. In this short article, we will see exactly how we can use it with simple steps to lend and borrow.

Recently, Defi Saver launched on L2s Arbitrum and Optimism as well, so we will be seeing how we can use it on Arbitrum as the gas fees are considerably low when compared to Ethereum mainnet. Also, it gives a good change to use Arbitrum itself and qualify for a potential airdrop similar to Optimism.

In this article, we will be first creating a Defi Saver Smart Wallet, then deposit some funds onto Aave using Defi Saver, and also borrow some stables using the funds we have deposited as collateral.

A smart wallet is a Proxy wallet i.e. a smart contract which DefiSaver can use to transact on your behalf.

1. Creating Smart Wallet

First, point your Metamask network to Arbitrum and head to DefiSaver, connect your wallet. DefiSaver will show you the wallet’s balance. On the left side panel, select Aave.

Next, select the Smart Wallet button. This will open the create smart wallet page. Click Create, and select Accept in the top right handside corner. This will create your Smart Wallet.

Once the txn has confirmed and the smart contract wallet has been created, we can start supplying assets to Aave from DefiSaver.

2. Supply ETH to AAVE

In the AAVE page, in the Smart Wallet tab, now you can see right on top the supply balance (amount you have supplied to Aave), Borrow balance (amount you have borrowed) and Safety Ratio

Click on the Supply tab, and enter any amount of ETH you wish to supply.

You will now see updated figures for your new supply balance, amount supplied, new borrow limit etc.

Click on Supply, and in the right hand side popup, accept the transaction then confirm it on Metamask.

Now when the transaction has confirmed, you have supplied to Aave on Defi Saver. You can see the updated Supply Balance, Borrow Limit, and if you scroll down you can see the breakup of the assets you have supplied.

3. Borrow DAI from AAVE

Now that you have supplied ETH to AAVE, you can borrow as well using the ETH you have supplied as collateral.

In the same Smart Wallet page, now select Borrow tab.

In this tab, select any asset you wish to borrow from the dropdown. We will try borrowing DAI, but you can borrow USDC or any other available asset too. For each asset, in the bottom of the page in market info section you can see the borrow rate. This is the interest you will pay to borrow.

You can see the maximum limit upto which you can borrow. Ideally, we wont borrow upto the limit, as you can get liquidated.

To set a safe limit to borrow (where you wont get liquidated unless the price of your collateral (ETH in this case) crashes by a lot), we can use the “Safety Ratio” % that is displayed. Here, if you enter a value close to the max borrow limit, The safety ratio will drop close to 100%. This is risky. However if you enter a low value, the safety ratio will be high enough, so that your position wont be risky.

For risk free borrowing, you can borrow an amount so that the safety ratio is over 400%. This gives you sufficient cover even if the price drops by a lot.

Once you enter the borrow amount, the new estimated borrow balance and new borrow limits will be shown. If you are satisfied with the safety ratio, you can click on Borrow (select Variable rate) and Accept the transaction, and submit it on Metamask.

Once the transaction has confirmed, you can see the updated values for borrow balance, your safety ratio, and remaining borrow balance.

In your wallet, the DAI you have borrowed will be available. You can use this for any other activity like yield farming or

4. Repaying and closing the position

To repay back the loan, you need to have the borrowed asset in your wallet. For example, if you borrowed 500 DAI, you need to have 500 DAI back in your wallet to close the position completely. You can also payback partially and close a portion of your loan.

For this, go to “Pay Back” tab and if you have the borrowed asset in your wallet, you can select the asset and click on Pay Back to repay the loan and close the position.

This is a simple way to lend and borrow from AAVE using Defi Saver. If you have spare ETH or wBTC, you can borrow stables and participate in liquidity mining programs with your idle assets. If your earning from farming > interest paid to borrow, you are making profit by just leveraging your assets. Defi Saver also has many complex functionalities like flash loans from Aave, inbuilt exchange (swap) and many more features are expected to launch on L2 soon.

Defi Saver doesnt have a token, and could reward regular users with an airdrop. To qualify, you can have better chances if you deposit and borrow a decent volume or use DeFi saver regularly.