$AUSD, Avaware’s stablecoin – what is it and how to take advantage of it?
AUSD is growing! Avaware’s stablecoin, launched at the end of November 2021, has been growing in importance during the end of last year and starts 2022 presenting good health. Are you ready to know a bit more about its utility and how it works?
In case anyone is still new in the DeFi world and does not know how stablecoins work, it is a type of token in which its price is always pegged to the real value of the US dollar, offering the possibility of using a token in which its value does not fluctuate in such a volatile way as we are used to in the crypto market. It is a perfect tool to take profit from your investments with a simple swap, so if you see that your favorite token has risen a lot in price and it is time to take profit, just convert it to USD! Not only will this reduce the risk of losing profit if your token goes down again, but you can also keep on farming while retaining its value.
For example, if you invested $100 in AVE when it was at $0.10 and after a while, its price becomes $1.00, congratulations! You have made an x10 on your investment and now you have $1000, what are you going to do now? Well, you have several options: You can sell your tokens to get your well-deserved profits, or you can continue to make a return on your investment by reducing some of the risks. How? A recommendable way to continue making profits at this point would be to convert half or part of your tokens to USD, now that their price is high, and thus make a new pool with which you can farm your AVE (or another token) and get a high interest passively while you sleep. That is to say, of the $1000 you have in AVE, you have converted half of its tokens to AUSD, now you have $500 of each, and you can pool both (AVE/AUSD), and then farm and get a juicy APR, with which you will generate more AVE or EMBR. At the time of writing this article the APR you can generate if you farm AVE/AUSD is 380% in Avaware, or 542% if you do it in Embr. Not bad, right? Right now you’ve kept half of your AVE, you’ve generated profits and you’re ‘printing’ more AVE with every passing minute and you’re reducing your risk of Impermanent Loss (if you’re new to this, I recommend you look into how the latter works), as only one of the two tokens has high volatility. But if you want to avoid Impermanent Loss at all costs and still farm your stables, you can always opt for the stable/stable pool option, generating an interesting APR as well. Right now you can farm AUSD/MIM for 41% APR in Embr, or AUSD/USDC for 55% APR in Avaware. Of course, these APRs can go down in the future as more liquidity is provided, so it is a smart move to take advantage of the high yields while they last.
But, if there are already many stablecoins in circulation, especially the larger ones such as USDT, USDC, DAI, or MIM, why use AUSD? One of the main reasons is to take advantage of a new product that will provide you with more incentives than if you use the ones that everyone else is already using. The most obvious example is the % APR you can generate with the different farming options, much higher than if you use the ‘big ones’. You only need to take a quick look at the different stablecoins, either stable/token or stable/stable, to see that if you use AUSD instead of other options you will generate more yield. This is because the liquidity of AUSD is much lower than the others, so more of the share will go to you. In addition, as it is logical since it is Avaware’s stable, it will have more economic incentives to be used within its own ecosystem, which is constantly growing, so its possibilities of use will increase progressively.
If you want to know more about AUSD and how it works, I recommend reading the dedicated articles on Medium: its launch, detailed explanation, and latest updates. If you want to get AUSD with your other stables, you can mint new tokens here (paying a 1% fee, which is quickly recovered by farming), or by swapping them on Embr (recommended) or other aggregators like paraswap.io. Both of these options allow arbitrage, so choose the one that suits you best at the time and take advantage of it if you see the chance.
