How does Atoken automatically accure its value?


Hey can anyone tell me how Aave atoken automatically accures its value?

Answers 1

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 ``` where ``` scaledATokenBalance = suppliedAmount / liquidityIndexAtTimeOfSupply ``` More [info](