🌊 Aave-Inspired DeFi Lending Protocol

A production-grade, audit-ready decentralized lending system inspired by Aave v2/v3. This project includes UUPS upgradeable smart contracts, an event-driven blockchain indexer, a NestJS backend with Redis caching, and a distributed fault-tolerant liquidation bot.

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🏗️ Architecture Overview

The system consists of six tightly integrated components:

1. Smart Contracts: UUPS upgradeable Solidity contracts with fixed-point wad/ray math for precise interest accrual.
2. PostgreSQL Database: Normalized schema with efficient indexing for rapid querying.
3. Blockchain Indexer: Event-driven, reorg-safe, idempotent processor that synchronizes on-chain state to the database.
4. NestJS Backend: Clean-architecture REST API with Redis caching and BullMQ background jobs.
5. Liquidation Bot: Distributed, fault-tolerant service scanning user health factors and executing liquidations.
6. Redis Infrastructure: Handles API rate limiting, caching, and distributed locks for the bot infrastructure.

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✨ Key Features

• Robust Smart Contracts: Features dual-slope interest rate models, reentrancy guards, and access control.
• Wad & Ray Mathematics: Industry-standard precision for compound interest and financial calculations to prevent precision loss.
• Reorg-Safe Indexing: The custom indexer handles blockchain reorganizations seamlessly with rollback mechanisms.
• Enterprise Backend: Built with NestJS, utilizing Redis token bucket rate-limiting and global exception filters.
• High-Performance Liquidation: Automated, profit-estimating bot with distributed Redis locking to prevent concurrent executions.
• Comprehensive Testing: Covered by Foundry unit, fuzz, and invariant tests, along with Jest-based backend testing.

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📂 Repository Structure

aave-lending/
├── contracts/           # Foundry-based smart contracts (Core, Libraries, Oracle, Tokenization)
├── backend/             # NestJS API backend (PostgreSQL + TypeORM)
├── indexer/             # Blockchain event listener and processor
├── liquidation-bot/     # Automated health factor scanner and executor
├── docker-compose.yml   # Local infrastructure (Postgres, Redis)
└── README.md

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🚀 Getting Started

Prerequisites

• Node.js (v18+ recommended)
• Docker & Docker Compose
• Foundry (for on-chain compilation and testing)

Installation

1. Clone the repository:

   git clone <repository_url>
   cd aave-lending

2. Start Infrastructure (PostgreSQL & Redis):

   docker-compose up -d

3. Install Backend Dependencies & Run:

   cd backend
   npm install
   cp .env.example .env # Configure your DB/Redis credentials
   npm run start:dev

4. Compile Smart Contracts:

   cd ../contracts
   forge build

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🧪 Testing

Smart Contracts

The contracts are heavily tested using the Foundry framework. This includes unit tests, fuzz testing, and invariant tests to ensure protocol solvency.

cd contracts
forge test -vvv

Backend

The backend utilizes Jest for unit and end-to-end testing, fully typed and configured.

cd backend
npm run test

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🛡️ Security

This system implements multiple security layers:

• Smart Contracts: Full coverage with zero-floating-point math. nonReentrant modifiers on all pool interactions. Strict Access Control roles via UUPS.
• Database: TypeORM parameterized queries to prevent SQL injection. Strict DB-level constraints (e.g., balances >= 0).
• Network Layer: Redis-backed distributed rate limiters to prevent DDoS and API abuse. Distributed bot locks prevent gas wars and duplicate executions.

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📄 License

This project is licensed under the MIT License.