Swapping Borrowed Assets

[chriscrutt]

Right now Instadapp allows you to swap your existing debt from one collateral type to another within the protocol.

It can be used to refinance debt to achieve a better rate and also used to execute a short position.

The caveat using Intsdapp is that you can only do it if you move your positions to their platform/smart contract. If you wish to withdraw back to your wallet you’re required to pay back all your loans :(

It would be nice if Aave implemented an easy way to swap debt (for example a USDT borrowed position into USDC) on its website for v2 and v3 while keeping your assets in your wallet and not having to liquidate/pay back loans.

edit: also added to governance.aave.com

edit 2: according to sakulstra it

should be possible with flashloans + e.g. paraswap which would be very similar to what is currently done for repay with collateral and collateral swap.

[chriscrutt]

looks like 0xPilou made a smart contract for this kind of thing in 2021

[ef3n9r98]

Hey @chriscrutt, I know some devs who'd be interested in working on this. Is there a budget for fixing this issue, and if so, how much?

I'd put this issue up on OpenQ.

Thanks!

[chriscrutt]

@drewcook was there an update? Lol

[drewcook]

Hey @chriscrutt - no updates, still an open issue.

[grothem]

This feature was added as part of https://github.com/aave/interface/pull/1668