waEthUSDC issue #149
Description
I ran some local tests on a mainnet fork around waEthUSDC and wanted to confirm whether my understanding of the mechanics is correct.
From what I understand, waEthUSDC is a yield-bearing wrapper (ERC-4626-style) on top of Aave USDC deposits, where the share price increases over time based on Aave’s borrow interest, without introducing any additional yield source.
From my observations:
After depositing USDC and minting waEthUSDC
The redeem value of waEthUSDC was already slightly higher than the initial deposit, even immediately after minting
I assume this is expected behavior due to share price mechanics and previously accumulated yield in the vault, but I wanted to sanity-check a few assumptions:
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Is it correct that waEthUSDC does not introduce any additional yield extraction beyond what Aave already distributes to USDC suppliers, and simply tokenizes existing aUSDC yield?
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Are there any scenarios where repeated mint → redeem cycles could meaningfully affect borrow-side liquidity, or is everything fully constrained by Aave’s utilization and interest rate model?
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In high utilization or low liquidity situations, would redeems simply fail or be delayed rather than allowing any pool imbalance?
This is not an exploit attempt, just a post-test sanity check to make sure I’m not missing any subtle edge cases.
Appreciate any clarification 🙏