AAVE Simulation#

In this example we consider the interaction between Aave and Uniswap:

A Uniswap Agent that trades between a Uniswap pool and an external market, modelled by a Geometric Brownian Motion, in order to make a profit.

Note

We consider the Uniswap v3 pool for WETH and DAI with fee 3000.

The price of the risky asset (WETH) in terms of the stablecoin (DAI) in the external market is modelled by a GBM.
Several Borrow Agents that borrow DAI from an Aave v3 pool and deposit WETH as collateral.
A Liquidation Agent that liquidates those positions from the Borrow agents that are in distress (that is, their Health Factors are < 1) as long as the liquidation is profitable for the liquidation agent.
Tip

The liquidator agent checks whether a liquidation is profitable before making the liquidation call:
- They check the amount of collateral that they would get by liquidation a fraction of a loan.
- They check the price of the trade in Uniswap necessary to close the short position in the debt asset.
- If they get a profit after closing their short position in the debt asset, then they make the transaction.