Credit Delegation Module (CDM)

The Credit Delegation Module (CDM) is the only contract Arenas deploys. It connects two external systems — Aave v3 (Base) for liquidity and Atomica (Base) for credit — so a supplier can put idle Aave collateral to work in Atomica financing pools.

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What it does

The CDM automates the borrow-from-Aave, supply-to-Atomica strategy in one place:

1. A supplier keeps collateral on Aave v3 (earning Aave’s base supply yield).

2. They delegate borrowing power to the CDM using Aave’s standard credit-delegation interface.

3. The CDM borrows from Aave against that delegated power and supplies the liquidity into Atomica pools.

4. Because Atomica’s supply yield exceeds the Aave borrow rate, the supplier earns the spread as bonus yield — on top of the base Aave yield they keep.

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Aave credit delegation (the mechanism it builds on)

The CDM uses Aave’s native credit delegation — nothing forked or reimplemented:

• The supplier (delegator) calls approveDelegation on the relevant Aave VariableDebtToken, authorizing the CDM (delegatee) for an amount.

• The CDM calls borrow on the Aave Pool with the delegator’s address as onBehalfOf.

• Aave’s own rules still apply: eMode category must match, and a borrow that would push the delegator’s health factor below the liquidation threshold reverts. Collateral must be supplied before the borrow executes.

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Risk

This is a leveraged position. The borrowed amount accrues Aave interest, the delegator’s Aave collateral remains subject to Aave’s health-factor and liquidation rules, and the Atomica financing carries credit risk. The bonus only holds while Atomica yield exceeds the Aave borrow cost. See the Aave Market strategy and Atomica Risks.

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Not affiliated with Aave. Aave v3 is a permissionless public good; Arenas uses its publicly available liquidity and the standard credit-delegation interface. Aave is one optional, external liquidity source — not the Arenas engine.