Implementing Lending and Borrowing Functionality in your Code

Now that you have a solid understanding of the AAVE protocol and its key components, it’s time to start implementing lending and borrowing functionality in your code. In this article, we’ll cover the steps you need to take to set up a simple lending and borrowing application using AAVE and Web3. We’ll walk you through the process of connecting to the AAVE network, interacting with the LendingPool contract, and implementing the core lending and borrowing functionality.

Prerequisites

Before you begin, you’ll need to make sure you have the following tools and dependencies installed:

• Node.js: You’ll need Node.js installed on your machine to run the code in this article. You can download the latest version of Node.js from the official website.
• npm: npm is the package manager for Node.js. You’ll need it to install the dependencies for this project. npm is included with Node.js, so you don’t need to install it separately.
• Web3.js: Web3.js is a library for interacting with the Ethereum blockchain. You’ll use it to connect to the AAVE network and interact with the AAVE contracts.
• @aave/aave-js: This is the official AAVE library for JavaScript. You’ll use it to access the LendingPool contract and other AAVE contracts.

To install these dependencies, create a new directory for your project and run the following commands:

npm init
npm install web3
npm install @aave/aave-js

Connecting to the AAVE Network

To connect to the AAVE network, you’ll need an Ethereum wallet that contains some test Ether. You can use MetaMask or another Web3 wallet to create a new wallet and obtain some test Ether from a faucet. Once you have a wallet with test Ether, you can use Web3.js to connect to the AAVE network.

To connect to the AAVE network, you’ll need to specify the network URL and the wallet address. The network URL is the endpoint of the Ethereum node that you want to connect to. For the mainnet, the URL is https://mainnet.aave.com. For the testnet, the URL is https://testnet.aave.com.

To connect to the AAVE network, you can use the HttpProvider class from Web3.js and pass it the network URL as an argument. Then, you can use the eth.accounts.wallet.add() method to add your wallet address to the wallet. You can also use the eth.getBalance() method to check the balance of your wallet.

Here’s an example of how to connect to the AAVE network and check the balance of your wallet:

const Web3 = require('web3');

const networkURL = 'https://testnet.aave.com'; // the URL of the Ethereum node
const walletAddress = '0xMyWalletAddress'; // the address of your wallet

const web3 = new Web3(new Web3.providers.HttpProvider(networkURL)); // create a new Web3 instance

web3.eth.accounts.wallet.add(walletAddress); // add your wallet address to the wallet

const balance = web3.eth.getBalance(walletAddress); // get the balance of your wallet

console.log(balance); // print the balance

Interacting with the LendingPool Contract

Now that you’re connected to the AAVE network, you can start interacting with the LendingPool contract. The LendingPool contract is the main contract on AAVE that enables users to lend and borrow assets. It contains several methods that you can use to perform lending and borrowing operations.

To interact with the LendingPool contract, you’ll need to know the contract address and the ABI (Application Binary Interface). The contract address is the Ethereum address of the LendingPool contract on the AAVE network. The ABI is a JSON object that defines the methods and events of the contract.

To get the contract address and the ABI, you can use the aave.lendingPool.address and aave.lendingPool.abi properties of the aave-js library, respectively. Here’s an example of how to get the contract address and the ABI:

const Aave = require('@aave/aave-js');

const aave = new Aave(web3); // create a new Aave instance

const lendingPoolAddress = aave.lendingPool.address; // get the contract address
const lendingPoolABI = aave.lendingPool.abi; // get the contract ABI

Once you have the contract address and the ABI, you can use the eth.Contract() method from Web3.js to create a contract instance. You can then use the instance to call the methods of the contract.

Here’s an example of how to create a contract instance for the LendingPool contract:

const lendingPool = new web3.eth.Contract(lendingPoolABI, lendingPoolAddress); // create a contract instance

Lending and Borrowing Functionality

Now that you have a contract instance for the LendingPool contract, you can start implementing the core lending and borrowing functionality in your code.

To lend an asset using the AAVE protocol, you can use the lend() method of the LendingPool contract. This method takes an asset address, an amount in wei, and a duration in seconds as arguments, and returns a transaction object. You can then use the send() method of the transaction object to execute the transaction.

Here’s an example of how to lend an asset using the AAVE protocol:

const assetAddress = '0xMyAssetAddress'; // the address of the asset you want to lend
const amount = 100; // the amount of the asset you want to lend (in wei)
const duration = 86400; // the duration of the loan (in seconds)

const lendTx = await lendingPool.methods.lend(assetAddress, amount, duration).send({ from: walletAddress }); // lend the asset

To borrow an asset using the AAVE protocol, you can use the borrow() method of the LendingPool contract. This method takes an asset address, an amount in wei, and a duration in seconds as arguments, and returns a transaction object. You can then use the send() method of the transaction object to execute the transaction.

Here’s an example of how to borrow an asset using the AAVE protocol:

const assetAddress = '0xMyAssetAddress'; // the address of the asset you want to borrow
const amount = 100; // the amount of the asset you want to borrow (in wei)
const duration = 86400; // the duration of the loan (in seconds)

const borrowTx = await lendingPool.methods.borrow(assetAddress, amount, duration).send({ from: walletAddress }); // borrow the asset

Conclusion

In this article, we covered the steps you need to take to set up a simple lending and borrowing application using AAVE and Web3. We showed you how to connect to the AAVE network, interact with the LendingPool contract, and implement the core lending and borrowing functionality in your code. With these tools and techniques, you can start building applications that leverage the power of the AAVE protocol and the Ethereum blockchain.

Exercises

To review these concepts, we will go through a series of exercises designed to test your understanding and apply what you have learned.

async function getAvailableSupply(assetAddress, amount) {
  const availableSupply = await lendingPool.methods.getAssetAvailableSupply(assetAddress).call();
  return availableSupply;
}

async function getMaxBorrow(assetAddress, amount) {
  const maxBorrow = await lendingPool.methods.getAssetMaxBorrow(assetAddress).call();
  return maxBorrow;
}

async function getBorrowCost(assetAddress, amount, duration) {
  const borrowCost = await lendingPool.methods.getBorrowCost(assetAddress, amount, duration).call();
  return borrowCost;
}

async function getTotalSupply(assetAddress, amount) {
  const totalSupply = await lendingPool.methods.getTotalSupply(assetAddress).call();
  return totalSupply;
}

async function getBorrowedAmount(assetAddress, amount) {
  const borrowedAmount = await lendingPool.methods.getBorrowedAmount(assetAddress).call();
  return borrowedAmount;
}