I would like to propose to issue MIMs using AAVE’s interest-bearing token, aTokens, as collateral.
AAVE’s TVL is always at the top of the ranking, and many people use AAVE to manage their assets. The ability of Abracadabra to issue MIMs with aTokens as collateral will allow more people to use Abracadabra, and as a result, I believe it will contribute to increasing the value of Abracadabra.
The aTokens are pegged 1:1 to the value of the underlying asset that is deposited in Aave protocol. aTokens are ERC20 tokens that have Pool(aDAI+aUSDC+aUSDT) in Curve and are guaranteed to be liquid. If the value of aTokens declines, the Abracadabra Protocol will liquidate the collateral by returning the aTokens to AAVE. This allows the protocol to liquidate the collateral before it loses money and makes a profit.