Last week I analyzed briefly about the AAVE reward, article is here, in this article, I am going to move forward to analyze more about the staked rewards flow and what users take these rewards to do. All the data, tool come from Flipside Crypto.
Again, let’s do a very quick introduction to Aave: Aave is a protocol, which you can lend/borrow money to get interest or fund. More details can be found in the Aave official introduction website: https://docs.aave.com/aavenomics/safety-module.
To analyze the rewards in AAVE, we need to know one contract, name is Aave: Incentives Controller, contract address is: 0xd784927Ff2f95ba542BfC824c8a8a98F3495f6b5. This smart contract control the incentive distribution across the Aave ecosystem, if we took a quick look at the Etherscan for this contract, then we can find users usually use it to claim rewards.
In this article, I am going to analyze this AAVE rewards flow from the following perspectives to analyze how Aave rewards (staking) are spent on mainnet:
- The logic to define rewards flow. How we know users take this reward money instead of their own money?
- The rewards flows, it might be reinvested, pay down loans or just simply liquidated/swapped for ETH.
Logic to define reward flow
All the daily reward analysis can be found in last week’s article, so I will not discuss much here. Firstly, let’s look at the distribution analysis for the users.
It is no surprise that this chart looks highly skewed, let’s look closer at it to shrink to the beginning, the top addresses get claimed rewards around 30M in total. Are we feel a little overwhelming to look at so many hash addresses? For sure. But we have the label information there in the Flipside dataset, which is really useful!
Getting labels to the analysis dataset, here is what we found, we can see that most of the addresses are small address, which is not the organization address to claim rewards, it makes the thing more interesting. So, go back to the above chart, let’s look at the first address to see why it get so many rewards and how it spend it.
The address is: 0x3DdfA8eC3052539b6C9549F12cEA2C295cfF5296, when we look at it in the Ethscan, we can find that it is really a huge account contains more than $3B tokens. Wow….
Let’s look at when this address claimed the reward, from the below chart we can see that the claim time varies, but the amount is really huge…
Then, let’s move to next section, the definition for the reward flow after the claimed can be 7 days after the claim the event they did for the stETH they hold.
Reward flow analysis
Followed by the last section, let’s grab all the events this address has done after it claimed the reward, here is the summary chart for the events
If we count it by the event_name, what we can find is that there are mainly 3 different events this address did after claimed the rewards, the size is the count of event called and darker the color is, more this event get called. We can see that most of the events are DelegatedPowerChanged and ~17% is transfer.
From the above analysis, we can have a quick conclusion for that:
- AAVE reward is a highly skewed distribution
- Large addresses get the rewards and then the next things they do is to tend relegated their rewards, making it more friendly to the ecosystem and then the other thing is to transfer the amount