Credit Delegation

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Credit Delegation
Native Credit Delegation (CD) is a new feature in Aave v2. It allows a depositor to deposit funds in the protocol to earn interest, and delegate borrowing power (i.e. their credit) to other users. The enforcement of the loan and its terms are agreed upon between the depositor and borrowers, which can be either off-chain via legal agreements or on-chain via smart contracts. 
This enables:
The depositor (delegator) to earn extra yield on top of the yield they already earn from the protocol,
The borrowers (delegatees) to access an uncollateralized loan.
Follow the below steps to create your first Credit Delegation.
TL;DR: A starter example contract can be found on Kovan etherscan and Github code examples repo, with a twitter discussion here.
In the following guide, we refer to borrower and delegatee. However credit delegation allows the delegation to multiple users, so it can also be read as borrowers and delegatees.
Approving the delegation
The approveDelegation() method must be called by the depositor (delegator), approving the borrower (delegatee) a certain amount. 
This is done for each debt token that needs to be delegated.
The depositor (delegator) does not need to already have deposited funds in the protocol to approveDelegation(). However, before the borrower (delegatee) executes borrow(), there must be sufficient collateral assigned to the depositor (delegator) in the protocol.
Solidity
Web3.js
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// Import relevant interfaces
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import './IAaveProtocolDataProvider.sol';
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import './IDebtToken.sol';
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​
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// ... beginning of your contract. Constructors etc...
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​
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// Within a relevant function in your contract:
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​
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    // Get the Protocol Data Provider
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    IAaveProtocolDataProvider provider = IAaveProtocolDataProvider(address(INSERT_DATA_PROVIDER_ADDRESS));
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    // Get the relevant debt token address
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    (, address stableDebtTokenAddress, address variableDebtTokenAddress) = provider.getReserveTokensAddresses(INSERT_ASSET_ADDRESS);
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​
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    // Relevant details for credit delegation
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    address borrower = address(INSERT_BORROWER_ADDRESS);
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    uint256 amountInWei = INSERT_DELEGATED_AMOUNT;
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    // For stable debt tokens
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    IDebtToken(stableDebtTokenAddress).approveDelegation(borrower, amountInWei);
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    // For variable debt tokens
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    IDebtToken(variableDebtTokenAddress).approveDelegation(borrower, amountInWei);
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​
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// Import relevant ABIs
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import IAaveProtocolDataProviderABI from './IAaveProtocolDataProviderAbi.json'
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import IDebtTokenABI from './IDebtToken.json'
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​
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// ... beginning of your code
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​
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// Within a relevant function in your code:
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​
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    // Get the Aave Protocol Data Provider
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    const provider = new web3.eth.Contract(IAaveProtocolDataProviderABI, INSERT_DATA_PROVIDER_ADDRESS)
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​
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    // Get the relevant debt token address
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    const tokenDetails = await provider.methods
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        .getReserveTokensAddresses(INSERT_ASSET_ADDRESS)
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        .call()
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        .catch((e) => {
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            throw Error(`Error getting token details: ${e.message}`)
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        })
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    // Relevant details for credit delegation
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    const borrower = INSERT_BORROWER_ADDRESS
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    const amountInWei = INSERT_DELEGATED_AMOUNT
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    // For stable debt tokens
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    const stableDebtContract = new web3.eth.Contract(IDebtTokenABI, tokenDetails.stableDebtTokenAddress)
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    await stableDebtContract.methods
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        .approveDelegation(borrower, amountInWei)
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        .send()
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        .catch((e) => {
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            throw Error(`Error approving delegation: ${e.message}`)
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        })
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    // For variable debt tokens
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    const variableDebtContract = new web3.eth.Contract(IDebtTokenABI, tokenDetails.variableDebtTokenAddress)
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    await variableDebtContract.methods
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        .approveDelegation(borrower, amountInWei)
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        .send()
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        .catch((e) => {
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            throw Error(`Error approving delegation: ${e.message}`)
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        })
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​
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Borrowing the credit
The borrower (delegatee) calls the borrow() method on the LendingPool, using the depositor's (delegator's) address in final parameter onBehalfOf.
The borrower's available credit is reduced by the borrowed amount.
Solidity
Web3.js
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// Import relevant interfaces
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import './IAddressesProvider.sol';
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import './ILendingPool.sol';
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​
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// ... beginning of your contract. Constructors etc...
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​
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// Within a relevant function in your contract:
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​
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    // Get the latest LendingPool contract for the relevant market
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    IAddressesProvider provider = IAddressesProvider(address(INSERT_ADDRESSES_PROVIDER_ADDRESS));
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    ILendingPool lendingPool = ILendingPool(provider.getLendingPool());
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    // Borrow the relevant amount
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    address assetToBorrow = address(INSERT_ASSET_ADDRESS); // E.g. the address for Dai
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    uint256 amountToBorrowInWei = INSERT_AMOUNT; // must be equal to or less than the amount delegated to the borrower
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    uint256 interestRateMode = INSERT_INTEREST_RATE_MODE; // must be of the same type as the debt token that is delegated. I.e. stable = 1, variable = 2.
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    uint16 referralCode = INSERT_REFERRAL_CODE;
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    address delegatorAddress = INSERT_DELEGATOR_ADDRESS;
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    lendingPool.borrow(assetToBorrow, amountToBorrowInWei, interestRateMode, referralCode, delegatorAddress);
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Copied!
1
// Import relevant ABIs
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import IAddressProviderABI from './IAddressesProviderAbi.json'
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import ILendingPoolABI from './ILendingPool.json'
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​
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// ... beginning of your code
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​
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// Within a relevant function in your code:
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​
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    // Get the latest LendingPool contract for the relevant market
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    const provider = new web3.eth.Contract(IAddressProviderABI, INSERT_ADDRESSES_PROVIDER_ADDRESS)
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    const lendingPoolAddress = await provider.methods
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        .getLendingPool()
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        .call()
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        .catch((e) => {
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            throw Error(`Error getting lendingPool address: ${e.message}`)
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        })
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    const lendingPoolContract = new web3.eth.Contract(ILendingPoolABI, lendingPoolAddress)
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    // Borrow the relevant amount
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    const assetToBorrow = INSERT_ASSET_ADDRESS; // E.g. the address for Dai
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    const amountToBorrowInWei = INSERT_AMOUNT; // must be equal to or less than the amount delegated to the borrower
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    const interestRateMode = INSERT_INTERST_RATE_MODE; // must be of the same type as the debt token that is delegated. I.e. stable = 1, variable = 2.
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    const referralCode = INSERT_REFERRAL_CODE;
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    const delegatorAddress = INSERT_DELEGATOR_ADDRESS;
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    await lendingPoolContract.methods
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        .borrow(
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            assetToBorrow,
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            amountToBorrowInWei,
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            interestRateMode,
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            referralCode,
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            delegatorAddress
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        )
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        .send()
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        .catch((e) => {
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            throw Error(`Error borrowing: ${e.message}`)
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        })
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​
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Repaying the credit
The borrower (delegatee) can also call repay() at anytime to repay their uncollateralized loan, passing in the depositor's (delegator's) address as the final parameter onBehalfOf.
There is no change to the borrower's available credit after repayment.
Solidity
Web3.js
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// Import relevant interfaces
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import './IAddressesProvider.sol';
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import './ILendingPool.sol';
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​
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// ... beginning of your contract. Constructors etc...
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​
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// Within a relevant function in your contract:
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​
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    // Get the latest LendingPool contract for the relevant market
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    IAddressesProvider provider = IAddressesProvider(address(INSERT_ADDRESSES_PROVIDER_ADDRESS));
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    ILendingPool lendingPool = ILendingPool(provider.getLendingPool());
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    // Repay the relevant amount
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    address assetToRepay = address(INSERT_ASSET_ADDRESS); // E.g. the address for Dai
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    uint256 amountToRepayInWei = INSERT_AMOUNT; // must be equal to or less than the amount delegated to the borrower=
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    uint256 interestRateMode = INSERT_INTEREST_RATE_MODE; // must be of the same type as the debt token that is delegated. I.e. stable = 1, variable = 2.
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    address delegatorAddress = INSERT_DELEGATOR_ADDRESS;
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    lendingPool.repay(assetToRepay, amountToRepayInWei, interestRateMode, delegatorAddress);
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Copied!
1
// Import relevant ABIs
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import IAddressProviderABI from './IAddressesProviderAbi.json'
3
import ILendingPoolABI from './ILendingPool.json'
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​
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// ... beginning of your code
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​
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// Within a relevant function in your code:
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​
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    // Get the latest LendingPool contract for the relevant market
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    const provider = new web3.eth.Contract(IAddressProviderABI, INSERT_ADDRESSES_PROVIDER_ADDRESS)
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    const lendingPoolAddress = await provider.methods
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        .getLendingPool()
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        .call()
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        .catch((e) => {
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            throw Error(`Error getting lendingPool address: ${e.message}`)
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        })
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    const lendingPoolContract = new web3.eth.Contract(ILendingPoolABI, lendingPoolAddress)
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    // Borrow the relevant amount
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    const assetToRepay = INSERT_ASSET_ADDRESS; // E.g. the address for Dai
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    const amountToRepayInWei = INSERT_AMOUNT; // must be equal to or less than the amount delegated to the borrower
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    const delegatorAddress = INSERT_DELEGATOR_ADDRESS;
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    await lendingPoolContract.methods
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        .repay(
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            assetToRepay,
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            amountToRepayInWei,
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            delegatorAddress
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        )
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        .send()
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        .catch((e) => {
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            throw Error(`Error repaying: ${e.message}`)
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        })
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​
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Increasing the credit delegation
To increase or decrease a borrower's available credit, the approveDelegation() method should be called again. This sets that new amount available to borrow on top of (not including) outstanding borrows. 
This is done for each debt token that requires a modification.
Solidity
Web3.js
1
// Import relevant interfaces
2
import './IAaveProtocolDataProvider.sol';
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import './IDebtToken.sol';
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​
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// ... beginning of your contract. Constructors etc...
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​
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// Within a relevant function in your contract:
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​
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    // Get the Protocol Data Provider
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    IAaveProtocolDataProvider provider = IAaveProtocolDataProvider(address(INSERT_DATA_PROVIDER_ADDRESS));
11
  
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    // Get the relevant debt token address
13
    (, address stableDebtTokenAddress, address variableDebtTokenAddress) = provider.getReserveTokensAddresses(INSERT_ASSET_ADDRESS);
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​
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    // Relevant details for credit delegation
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    address borrower = address(INSERT_BORROWER_ADDRESS);
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    uint256 amountInWei = INSERT_DELEGATED_AMOUNT; // This is the total amount to be delegated (not just the increase)
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    // For stable debt tokens
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    IDebtToken(stableDebtTokenAddress).approveDelegation(borrower, amountInWei);
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    // For variable debt tokens
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    IDebtToken(variableDebtTokenAddress).approveDelegation(borrower, amountInWei);
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​
Copied!
1
// Import relevant ABIs
2
import IAaveProtocolDataProviderABI from './IAaveProtocolDataProviderAbi.json'
3
import IDebtTokenABI from './IDebtToken.json'
4
​
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// ... beginning of your code
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​
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// Within a relevant function in your code:
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​
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    // Get the Aave Protocol Data Provider
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    const provider = new web3.eth.Contract(IAaveProtocolDataProviderABI, INSERT_DATA_PROVIDER_ADDRESS)
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​
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    // Get the relevant debt token address
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    const tokenDetails = await provider.methods
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        .getReserveTokensAddresses(INSERT_ASSET_ADDRESS)
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        .call()
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        .catch((e) => {
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            throw Error(`Error getting token details: ${e.message}`)
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        })
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    // Relevant details for credit delegation
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    const borrower = INSERT_BORROWER_ADDRESS
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    const amountInWei = INSERT_DELEGATED_AMOUNT // This is the total amount to be delegated (not just the increase)
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    // For stable debt tokens
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    const stableDebtContract = new web3.eth.Contract(IDebtTokenABI, tokenDetails.stableDebtTokenAddress)
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    await stableDebtContract.methods
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        .approveDelegation(borrower, amountInWei)
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        .send()
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        .catch((e) => {
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            throw Error(`Error approving delegation: ${e.message}`)
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        })
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    // For variable debt tokens
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    const variableDebtContract = new web3.eth.Contract(IDebtTokenABI, tokenDetails.variableDebtTokenAddress)
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    await variableDebtContract.methods
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        .approveDelegation(borrower, amountInWei)
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        .send()
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        .catch((e) => {
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            throw Error(`Error approving delegation: ${e.message}`)
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        })
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​
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Checking the amount delegated
To check the current allowance of a user, simply call borrowAllowance() passing in the depositor (delegator) and borrower (delegatee) addresses.
This is done for each debt token that is delegated.
Solidity
Web3.js
1
// Import relevant interfaces
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import './IAaveProtocolDataProvider.sol';
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import './IDebtToken.sol';
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​
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// ... beginning of your contract. Constructors etc...
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​
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// Within a relevant function in your contract:
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​
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    // Get the Protocol Data Provider
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    IAaveProtocolDataProvider provider = IAaveProtocolDataProvider(address(INSERT_DATA_PROVIDER_ADDRESS));
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    // Get the relevant debt token address
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    (, address stableDebtTokenAddress, address variableDebtTokenAddress) = provider.getReserveTokensAddresses(INSERT_ASSET_ADDRESS);
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​
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    // Relevant details for credit delegation
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    address delegator = address(INSERT_DEPOSITOR_ADDRESS)
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    address delegatee = address(INSERT_BORROWER_ADDRESS);
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    // For stable debt tokens
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    uint256 stableAllowance = IDebtToken(stableDebtTokenAddress).borrowAllowance(delegator, delegatee);
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    // For variable debt tokens
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    uint256 variableAllowance = IDebtToken(variableDebtTokenAddress).borrowAllowance(delegator, delegatee);
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​
Copied!
1
// Import relevant ABIs
2
import IAaveProtocolDataProviderABI from './IAaveProtocolDataProviderAbi.json'
3
import IDebtTokenABI from './IDebtToken.json'
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​
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// ... beginning of your code
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​
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// Within a relevant function in your code:
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​
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    // Get the Aave Protocol Data Provider
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    const provider = new web3.eth.Contract(IAaveProtocolDataProviderABI, INSERT_DATA_PROVIDER_ADDRESS)
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​
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    // Get the relevant debt token address
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    const tokenDetails = await provider.methods
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        .getReserveTokensAddresses(INSERT_ASSET_ADDRESS)
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        .call()
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        .catch((e) => {
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            throw Error(`Error getting token details: ${e.message}`)
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        })
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    // Relevant details for credit delegation
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    const delegator = INSERT_DEPOSITOR_ADDRESS
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    const delegatee = INSERT_BORROWER_ADDRESS
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    // For stable debt tokens
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    const stableDebtContract = new web3.eth.Contract(IDebtTokenABI, tokenDetails.stableDebtTokenAddress)
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    const stableAllowance = await stableDebtContract.methods
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        .borrowAllowance(delegator, delegatee)
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        .call()
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        .catch((e) => {
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            throw Error(`Error approving delegation: ${e.message}`)
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        })
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    // For variable debt tokens
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    const variableDebtContract = new web3.eth.Contract(IDebtTokenABI, tokenDetails.variableDebtTokenAddress)
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    const variableAllowance = await variableDebtContract.methods
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        .borrowAllowance(delegator, delegatee)
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        .call()
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        .catch((e) => {
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            throw Error(`Error approving delegation: ${e.message}`)
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        })
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​
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​
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Contents
Approving the delegation
Borrowing the credit
Repaying the credit
Increasing the credit delegation
Checking the amount delegated