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How Instadapp Works

Welcome to this post, where we are going to see how instadapp works, a platform that streamlines many processes, and saves a lot of commissions and time.

Instadapp is a platform that optimizes processes, and allows you to perform several processes in other protocols in a simple way and with an intuitive panel. This saves on gas fees, as you can perform several transactions in one automated way.

If you are new to DEFI, or have not used various protocols, it may be difficult to understand how it works and how useful instadapp is.

Thanks to its great utility, it has become one of the top 10 platforms with the highest total value locked or TVL of DEFI, with more than 10 billion $ (American) on its platform.

What is Instadapp

The Instadapp platform is a complete platform for both users and developers to leverage the full potential of DeFi. The Instadapp (‘DSL’) protocol acts as the middleware that aggregates multiple DeFi protocols into an upgradable smart contract layer. This structure allows Instadapp to access the full potential of decentralized finance.

The main functionalities of the DSL are account extensions and upgradability. The unique upgradability means that upcoming and new extensions will be updated, maintained and managed by INST governance. The DSL also includes a new operability layer that acts as an “account extension”. These extensions allow the user to access new and unique functionality for their DSL account. These extensions and the evolution of the platform form a DeFi hub through which new use cases and extensions can be created, some examples of possible use cases include: Flash Loan module, Authority extension, L2 extension, etc.

Instadapp has many functionalities, where you can even program functions if you have programming skills. However, we will focus on what you can do as a normal user, without the need to know code or complex aspects.

Instadapp brings together strategies that users perform in DEFI, such as maximizing your collateral in AAVE of a cryptocurrency, and makes it easier. Where by simply selecting the strategy, and indicating the cryptocurrency, it is executed automatically. Unlike doing it on your own, where you would have to make several transactions.

This is the main advantage that Instadapp brings. Where in various protocols, you can perform several actions in one, and save on gas fees, especially if you want to use the ethereum network.

Currently, instadapp is on etheruem, polygon, avalanche and arbitrum. On all networks you can find strategies for AAVE, and on ethereum, you can also find strategies on other platforms such as Maker, Compound, Uniswap, Liquidity and INST. Although really the most used aspect in all the networks are the strategies in AAVE.

It also adds a very interesting option, which allows you to migrate your AAVE positions from one network to another, thanks to instadapp and that we will see later.

Strategies

There are many strategies and uses, so we will use an example in polygon, since it is a network with low commissions and that it is possible that many can and want to use. Although the operation is the same in avalanche, arbitrum or ethereum.

To start, you must connect your wallet to the polygon network, in this case. Click on connect at the top right and confirm in your wallet. The next step is to deposit funds into your instadapp account. To do this, click on deposit, indicate the cryptocurrency you want to deposit and use for the AAVE strategy. We indicate the amount, click on deposit and confirm in our wallet.

Unlike other platforms, you must first deposit the funds inside to use them. However, you can withdraw them at any time back to your wallet by clicking on withdraw.

Once you have deposited funds, we will go to the main menu. Here, you will see the AAVE logo below and click on Manage. Currently in polygon there is only AAVE, but it is possible that in the future there will be more options. Also mention that we are going to see an example of a strategy, but you should make the strategy you are interested in.

As you can see, on the right side there are different types of strategies to perform with instadapp. I recommend that if you don’t know the annual % offered by AAVE, you should consult it before performing any strategy and really understand what each strategy does.

Some strategies are going to require that we have deposited cryptocurrencies with AAVE through instadapp. While others, you can make a strategy directly to deposit and borrow in a single transaction.

For this example, we will use Matic and the leverage/max mining strategy. What this strategy does, is to borrow a cryptocurrency and deposit it as collateral, taking into account that we have previously deposited funds. If we were to do this manually in AAVE, it could be 2 to 3 transactions, with the gas fee that this implies, especially using the ethereum network. Instead, with instadapp you can do it with a single transaction and faster.

To do this, we will first go to supply, for example from Matic, if we want to maximize our position in Matic. We click on supply, indicate the amount, supply and confirm in our wallet.

Now we select the strategy, and in collateral we indicate matic, and in debt, we can select a stablecoin or Matic directly. Above, you can see what this strategy does and you must indicate the amount you want to re-deposit matic inside AAVE in this case. If you scroll down, you can see the risk it has, and the maximum you can add. You can also see in green if it is safe, yellow with risk and red with high risk or that it exceeds the borrowing limit.

With the amount indicated, click on leverage, confirm in your wallet and that’s it. Now you will be able to see in the main panel your position, and undo it at any time. You will also be able to see the risk of your position at any time from the main panel, to see if you need to add more collateral or want to undo the position because you have a higher risk. You will be able to see the percentage, for example 30% and the maximum which is usually 65%, where your position would be liquidated.

You will be able to see the annual % that you are receiving with this position, and claim in claim the rewards in Matic in this case that you have been generating.

Keep in mind that each strategy will ask you for different aspects, depending on what it performs. Therefore, always understand well what it does before placing your money there.

Interop

Finally, I would like to comment on this option that is in beta but is very interesting.

In interop, you will be able to migrate your entire AAVE position from one network to another, just by using this bridge. Although you have to take into account that you will only be able to migrate the positions and tokens that are also in the other network. For example, Matic you will not be able to migrate it to Avalanche. But if you have for example BTC or USDT, USDC you will be able to directly migrate your position to another network.

This is very useful, taking into account the incentive programs launched by some networks such as Avalanche or Polygon, where you can migrate your tokens in an easy and fast way, and get better annual %, when migrating to a network with a better reward program. At the bottom you can find all the information and keep in mind that it is in beta.

Still, if you want to migrate from one network to another, you can save a lot of transactions and commissions by using this instadapp option.

I hope it has helped you to know more in detail everything you need to know about instdapp and you can get the most out of it. Remember that if you don’t have an account with binance, you can create one just below.

Platform: Binance
Min. deposit: $10
License: Cysec

Very low commissions
Exchange with more cryptocurrencies

5/5

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