SKIP TO CONTENT
TVL $157MAPY 0.16%low riskUpdated Feb 1, 2025

Aave Ethereum sDAI

Supply sDAI to Aave V3 on Ethereum. sDAI is the yield-bearing version of DAI from Sky Savings Rate, already earning native yield before Aave supply.

ProtocolAave V3
Networkethereum
SymbolAETHSDAI
CategoryMoney Markets
Underlying Assets
sDAIDAI
Contract Address0x4c612e3b15b96ff68c6a92bc1de05f4c4bc9a4e4

What is Aave Ethereum sDAI?

Aave Ethereum sDAI is a lending market for Sky's sDAI (Savings DAI), the yield-bearing wrapper for DAI. sDAI automatically earns the Sky Savings Rate (SSR), meaning it accrues yield before even being deposited into Aave. This creates a stacked yield opportunity: SSR yield plus Aave supply yield.

How This Market Works

sDAI lending creates layered returns:

  1. Convert DAI to sDAI (starts earning SSR, typically 5-8%)
  2. Deposit sDAI into Aave V3 lending pool
  3. Receive aETHsDAI tokens representing your position
  4. Earn additional interest from sDAI borrowers
  5. Total yield = Sky Savings Rate + Aave supply yield
Low Native APY: Like other yield-bearing collateral, sDAI has low Aave supply rates because the asset already generates yield. Borrowers use sDAI primarily as collateral.

What Assets Are Involved

Supply Asset: sDAI (Savings DAI) - yield-bearing DAI wrapper Receipt Token: aETHsDAI - Aave deposit token Underlying: DAI earning Sky Savings Rate

sDAI in Aave is used for:

  • Collateral while continuing to earn SSR
  • Capital efficiency (using yield-bearing assets as collateral)
  • Accessing liquidity without exiting SSR position
  • Leveraged savings strategies

Sky Savings Rate (SSR)

The SSR is set by Sky governance:

  • Currently offers competitive stablecoin yields
  • Yield comes from DAI borrowers in the Sky ecosystem
  • Rate adjusts based on market conditions and governance
  • Historically ranged from 1% to 15%+ depending on market conditions

Risk Disclosures

Smart Contract Risk: Exposure to both Aave V3 and Sky protocol contracts. Each adds risk surface. SSR Dependency: sDAI's value appreciation depends on the Sky Savings Rate. Rate changes directly affect yield expectations. Governance Risk: Both Aave and Sky are governed by token holders. Parameter changes in either protocol affect sDAI positions. Peg Risk: sDAI's underlying DAI could experience peg instability during extreme market conditions. Oracle Risk: sDAI's value must be accurately tracked, accounting for accumulated SSR yield. Utilization Risk: While typically low for yield-bearing collateral, market stress could affect withdrawals. Rate Competition: High SSR rates may draw capital away from Aave sDAI markets, affecting liquidity.

Related Money Markets

Aave Ethereum WETH1.25% APYAave Ethereum USDT2.45% APYAave Ethereum wstETH0.01% APYAave Ethereum USDC3.47% APYAave Ethereum WBTC0.01% APY
Disclaimer: APY and TVL figures are based on on-chain data and may fluctuate. Past performance does not guarantee future results. DeFi investments carry smart contract, market, and liquidity risks. This content is for informational purposes only and does not constitute financial advice. Always conduct your own research before investing.

Find comparable opportunities across protocols.

Track live yields, compare protocols, and build your DeFi portfolio with Fensory.

GET EARLY ACCESSArrow right
← BACK TO MONEY MARKETSALL PRODUCTS