How does Atoken automatically accure its value?
- Aave Protocol
- aTokens Aave
Hey can anyone tell me how Aave atoken automatically accures its value?
Each borrowable asset has a
liquidityIndex, which is constantly increasing at a rate determined by the amount of interest being paid by all borrowers. Every Aave aToken holder earns interest proportional to their share of the Aave pool, so their real-time balance is
scaledATokenBalance * liquidtyIndex
scaledATokenBalance = suppliedAmount / liquidityIndexAtTimeOfSupply