{
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  "schemaVersion": "1.0.0",
  "id": "variable-debt-tokens",
  "canonical": "https://degreesofsatoshi.com/encyclopedia/variable-debt-tokens/",
  "collection": "defi",
  "title": "Variable debt tokens: tracking a borrower’s growing obligation",
  "description": "Understand Aave variable-debt tokens as non-transferable borrowing records whose balances include accrued interest, rather than tradeable yield assets.",
  "aliases": [],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T18:15:18.493Z",
    "dataAsOf": "2026-10-02"
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "Aave variable-debt tokens record a borrower’s outstanding principal plus accrued variable-rate interest. Their accounting uses a debt index, and ordinary transfer and approval functions are disabled. They represent an obligation, not a freely transferable asset or a reward earned by the borrower.",
    "claimId": "variable-debt-tokens-quick-answer",
    "sourceIds": [
      "aave-tokens",
      "aave-reserve-logic"
    ]
  },
  "keyFacts": [
    {
      "label": "Meaning",
      "value": "The balance represents current variable-rate debt in underlying-asset units.",
      "sourceIds": [
        "aave-tokens"
      ],
      "id": "meaning",
      "claimId": "variable-debt-tokens-fact-meaning"
    },
    {
      "label": "Transfer",
      "value": "Ordinary ERC-20 transfer and approve functionality is disabled.",
      "sourceIds": [
        "aave-tokens"
      ],
      "id": "transfer",
      "claimId": "variable-debt-tokens-fact-transfer"
    },
    {
      "label": "Index",
      "value": "Scaled debt accounting uses the reserve’s variable borrowing index.",
      "sourceIds": [
        "aave-reserve-logic"
      ],
      "id": "index",
      "claimId": "variable-debt-tokens-fact-index"
    }
  ],
  "prerequisites": [
    "defi-lending-pools"
  ],
  "sections": [
    {
      "id": "accrual",
      "heading": "A fixed borrowing event can produce a growing obligation",
      "sourceIds": [
        "aave-tokens",
        "aave-reserve-logic"
      ],
      "paragraphs": [
        "Borrowing 100 units creates debt accounting that can later represent more than 100 as interest accrues. The increase follows the reserve’s rate and index rules.",
        "The amount needed to repay at a later block can differ from the amount originally borrowed. Use current debt data when preparing repayment."
      ]
    },
    {
      "id": "delegation",
      "heading": "Credit delegation is different from transferring a debt token",
      "sourceIds": [
        "aave-pool",
        "aave-glossary"
      ],
      "paragraphs": [
        "Aave exposes borrowing-delegation mechanisms separately from ordinary token transfer. Delegating borrowing power is an authorization decision under protocol rules, not a way to send an existing debt balance to an unsuspecting address.",
        "Inspect the approved delegatee and allowance in the actual implementation. A non-transferable token can still participate in a system with powerful delegated permissions."
      ]
    },
    {
      "id": "risk",
      "heading": "Debt and collateral can move in different units",
      "sourceIds": [
        "aave-pool",
        "aave-reserve"
      ],
      "paragraphs": [
        "A debt denominated in one asset can become harder to support if its value rises relative to the collateral or if accrued interest increases the obligation.",
        "The debt-token balance is one input to risk calculations. Oracle prices, collateral thresholds and available liquidation mechanisms also matter."
      ]
    }
  ],
  "faq": [
    {
      "question": "Can I get rid of a loan by transferring its debt token elsewhere?",
      "answer": "Not through an ordinary token transfer. The cited variable-debt implementation disables that functionality; debt reduction follows the protocol’s repayment and liquidation rules.",
      "sourceIds": [
        "aave-tokens",
        "aave-pool"
      ]
    }
  ],
  "claims": [
    {
      "id": "variable-debt-tokens-quick-answer",
      "articleSlug": "variable-debt-tokens",
      "statement": "Aave variable-debt tokens record a borrower’s outstanding principal plus accrued variable-rate interest. Their accounting uses a debt index, and ordinary transfer and approval functions are disabled. They represent an obligation, not a freely transferable asset or a reward earned by the borrower.",
      "sourceIds": [
        "source-8a1758eedafba9ec",
        "source-7f081b54ee6558ab"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-8a1758eedafba9ec",
          "locator": "aToken; VariableDebtToken"
        },
        {
          "sourceId": "source-7f081b54ee6558ab",
          "locator": "getNormalizedIncome; getNormalizedDebt; updateState"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T18:15:18.493Z",
        "reviewer": "automated independent verification — DeFi expansion reviewer",
        "notes": [
          "Read VariableDebtToken principal-plus-interest accounting and disabled transfer, allowance, approve and transferFrom functions; compared ReserveLogic variable debt index.",
          "Changed delegation section citation to Pool borrow/approveDelegation plus the Aave glossary because the tokenization page did not itself explain that authorization clearly. Delegation is not portrayed as transferring an existing liability."
        ]
      }
    },
    {
      "id": "variable-debt-tokens-fact-meaning",
      "articleSlug": "variable-debt-tokens",
      "statement": "Meaning: The balance represents current variable-rate debt in underlying-asset units.",
      "sourceIds": [
        "source-8a1758eedafba9ec"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-8a1758eedafba9ec",
          "locator": "aToken; VariableDebtToken"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T18:15:18.493Z",
        "reviewer": "automated independent verification — DeFi expansion reviewer",
        "notes": [
          "Read VariableDebtToken principal-plus-interest accounting and disabled transfer, allowance, approve and transferFrom functions; compared ReserveLogic variable debt index.",
          "Changed delegation section citation to Pool borrow/approveDelegation plus the Aave glossary because the tokenization page did not itself explain that authorization clearly. Delegation is not portrayed as transferring an existing liability."
        ]
      }
    },
    {
      "id": "variable-debt-tokens-fact-transfer",
      "articleSlug": "variable-debt-tokens",
      "statement": "Transfer: Ordinary ERC-20 transfer and approve functionality is disabled.",
      "sourceIds": [
        "source-8a1758eedafba9ec"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-8a1758eedafba9ec",
          "locator": "aToken; VariableDebtToken"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T18:15:18.493Z",
        "reviewer": "automated independent verification — DeFi expansion reviewer",
        "notes": [
          "Read VariableDebtToken principal-plus-interest accounting and disabled transfer, allowance, approve and transferFrom functions; compared ReserveLogic variable debt index.",
          "Changed delegation section citation to Pool borrow/approveDelegation plus the Aave glossary because the tokenization page did not itself explain that authorization clearly. Delegation is not portrayed as transferring an existing liability."
        ]
      }
    },
    {
      "id": "variable-debt-tokens-fact-index",
      "articleSlug": "variable-debt-tokens",
      "statement": "Index: Scaled debt accounting uses the reserve’s variable borrowing index.",
      "sourceIds": [
        "source-7f081b54ee6558ab"
      ],
      "sourceLocators": [
        {
          "sourceId": "source-7f081b54ee6558ab",
          "locator": "getNormalizedIncome; getNormalizedDebt; updateState"
        }
      ],
      "scope": {
        "collection": "defi",
        "dataAsOf": "2026-10-02",
        "blockHeight": null
      },
      "qualification": "",
      "evidenceStatus": "documented",
      "verification": {
        "status": "verified",
        "method": "independent automated source review",
        "checkedAt": "2026-10-02T18:15:18.493Z",
        "reviewer": "automated independent verification — DeFi expansion reviewer",
        "notes": [
          "Read VariableDebtToken principal-plus-interest accounting and disabled transfer, allowance, approve and transferFrom functions; compared ReserveLogic variable debt index.",
          "Changed delegation section citation to Pool borrow/approveDelegation plus the Aave glossary because the tokenization page did not itself explain that authorization clearly. Delegation is not portrayed as transferring an existing liability."
        ]
      }
    }
  ],
  "sources": [
    {
      "id": "aave-tokens",
      "label": "Tokenization",
      "publisher": "Aave",
      "url": "https://aave.com/docs/aave-v3/smart-contracts/tokenization",
      "locator": "aToken; VariableDebtToken",
      "note": "Supply receipt and nontransferable debt accounting using interest indexes.",
      "version": "Aave V3 documentation",
      "checkedAt": "2026-10-02T17:03:44.686Z",
      "contentSha256": "8ffed956886dda4a4e36704b1f63b33bf2c270ebecefe048a8cce3bb46d55c10",
      "recordId": "source-8a1758eedafba9ec"
    },
    {
      "id": "aave-reserve-logic",
      "label": "Aave V3 ReserveLogic",
      "publisher": "Aave",
      "url": "https://raw.githubusercontent.com/aave/aave-v3-core/v1.19.3/contracts/protocol/libraries/logic/ReserveLogic.sol",
      "locator": "getNormalizedIncome; getNormalizedDebt; updateState",
      "note": "Cumulative supply and borrow indexes update accounting over time.",
      "version": "aave-v3-core v1.19.3",
      "checkedAt": "2026-10-02T17:03:44.467Z",
      "contentSha256": "6b827ea494fa5bb1b38fa9e7db973bd0aed0ee3d53677cac950f6614cb8fd0c9",
      "recordId": "source-7f081b54ee6558ab"
    },
    {
      "id": "aave-pool",
      "label": "Pool",
      "publisher": "Aave",
      "url": "https://aave.com/docs/aave-v3/smart-contracts/pool",
      "locator": "supply; withdraw; borrow; liquidationCall",
      "note": "Collateralization, available liquidity and liquidation operations.",
      "version": "Aave V3 documentation",
      "checkedAt": "2026-10-02T17:03:44.834Z",
      "contentSha256": "73645ef223ef64419c7301794cfc4089bc79b6bfce71373b0125fd5e9a78f1b2",
      "recordId": "source-b35859a766315ce4"
    },
    {
      "id": "aave-glossary",
      "label": "Aave Docs Glossary",
      "publisher": "Aave",
      "url": "https://www.aave.com/docs/resources/glossary",
      "locator": "APY; Borrow Cap; Credit Delegation; Debt Ceiling",
      "note": "Protocol glossary distinguishes APY including compounding from APR and defines lending terms.",
      "version": null,
      "checkedAt": "2026-10-02T17:58:05.650Z",
      "contentSha256": "d187d006c1343e0a48ba293b7893216184e9a344032c74d6ccb2900e96fd23f5",
      "recordId": "source-8847a72e1c4b461f"
    },
    {
      "id": "aave-reserve",
      "label": "Reserve",
      "publisher": "Aave",
      "url": "https://www.aave.com/docs/aave-v3/concepts/reserve",
      "locator": "Key Reserve Parameters; Dynamic Parameters and Governance",
      "note": "Reserve LTV, liquidation threshold, borrow availability, caps and rate parameters.",
      "version": "Aave V3 documentation",
      "checkedAt": "2026-10-02T17:03:44.647Z",
      "contentSha256": "d0a67f33949654d88c124c14222ce1e493f86a9895b956b5e7b99c5f8102e672",
      "recordId": "source-15989fc372ee02a4"
    }
  ],
  "related": {
    "articles": [
      "money-market-interest-indexes",
      "aave-atokens",
      "defi-liquidations"
    ],
    "dossiers": [],
    "wallets": []
  },
  "revisionHistory": [
    {
      "date": "2026-10-02",
      "kind": "published",
      "summary": "First publication after primary-source research and independent automated verification."
    }
  ],
  "citation": "Degrees of Satoshi editorial project. “Variable debt tokens: tracking a borrower’s growing obligation.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/variable-debt-tokens/"
}