Setting Up a Local AAVE Test Environment

As a decentralized finance (DeFi) developer, it’s important to test your applications and smart contracts before deploying them to the main Ethereum network. To do this, you can set up a local test environment using AAVE protocol, which allows you to simulate the behavior of the AAVE protocol on a local Ethereum network.

In this article, we’ll walk you through the process of setting up a local AAVE test environment, including how to install and configure the necessary dependencies and tools.

Prerequisites

Before you begin, make sure you have the following prerequisites in place:

• A computer with an internet connection
• Node.js and npm installed (see the previous lesson for instructions)
• Truffle installed (see the previous lesson for instructions)
• MetaMask installed and configured (see the previous lesson for instructions)

Installing Ganache

To set up a local Ethereum network, you’ll need to install Ganache, which is a local blockchain tool that allows you to run your own private Ethereum network.

To install Ganache, follow these steps:

1. Go to the Ganache website (https://www.trufflesuite.com/ganache) and click the “Download” button to download the latest version of Ganache.
2. Run the downloaded installer file and follow the prompts to install Ganache.
3. Once Ganache is installed, launch the application and click the “Quickstart” button to create a new workspace.
4. In the “New Workspace” dialog, give your workspace a name and click the “Create Workspace” button.
5. Ganache will now create a new private Ethereum network for you to use for testing.

Connecting MetaMask to Ganache

Once you have Ganache set up, you’ll need to connect MetaMask to your local Ethereum network so that you can interact with it from your web browser. To do this, follow these steps:

1. Click the MetaMask icon in your browser’s toolbar to open the MetaMask extension.
2. In the MetaMask window, click the “Network” dropdown and select “Custom RPC”.
3. In the “New RPC URL” field, enter the following URL: http://127.0.0.1:7545
4. Click the “Save” button to add the custom RPC to your MetaMask network list.
5. In the MetaMask window, click the “Accounts” tab and then click the “Import Account” button.
6. In the “Private Key” field, enter the private key for one of the accounts listed in the Ganache accounts table. You can find the private keys by clicking the “Key” icon next to each account in the Ganache accounts table.
7. Click the “Import” button to import the account into MetaMask.

You should now be connected to your local Ethereum network in MetaMask. You can verify this by checking the network name in the MetaMask window, which should show “Private Network”.

Installing the AAVE Protocol Smart Contracts

To use AAVE protocol on your local Ethereum network, you’ll need to deploy the AAVE protocol smart contracts to your local chain. To do this, follow these steps:

1. Clone the AAVE protocol repository from GitHub:

git clone https://github.com/aave/aave-protocol.git

2. Navigate to the aave-protocol directory and install the required dependencies:

cd aave-protocol
npm install

3. Compile the smart contracts:

truffle compile

4. Migrate the smart contracts to your local Ethereum network:

truffle migrate

This will deploy the AAVE protocol smart contracts to your local Ethereum network.

Using AAVE Protocol on Your Local Network

Now that you have AAVE protocol deployed on your local Ethereum network, you can start using it to test your DeFi applications. To do this, you’ll need to use the aave-js library (https://aave.com/developers/docs/aave-js) to interact with AAVE protocol from your DApps.

For example, you can use the Aave.createInstance() method to connect to AAVE protocol, and then use the lend() and borrow() methods to lend and borrow assets, respectively. You can also use the getBalance() method to check the balance of an Ethereum account on AAVE protocol.

Conclusion

In this article, we’ve covered the steps you need to take to set up a local AAVE test environment for testing your DeFi applications and smart contracts. By using a local Ethereum network and AAVE protocol, you can simulate the behavior of the AAVE protocol and test your applications in a safe and controlled environment before deploying them to the main Ethereum network.

Exercises

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

git clone https://github.com/aave/aave-protocol.git

cd aave-protocol 
npm install

truffle compile

truffle migrate

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

const aave = Aave.createInstance();

await aave.lend('DAI', '100000000'); // lend 100 DAI
await aave.borrow('DAI', '100000000'); // borrow 100 DAI

const balance = await aave.getBalance('0x1234567890abcdef');
console.log(balance); // 1234567890