Safety Module Emission Update
01Summary
Reduce AAVE emissions to stkAAVE from 315 to 260 per day (3.94% to 3.25% APY) and stkABPT from 216 to 130 per day (10.09% to 6.10% APY). Lower maximum slashing from 20% to 10% for both safety modules due to strong deposit growth and equilibrium achievement since the Umbrella upgrade.
- Type
- parameter change
Key changes
- Reduce stkAAVE emissions from 315 AAVE/day to 260 AAVE/day (3.94% to 3.25% APY)(high)
- Reduce stkABPT emissions from 216 AAVE/day to 130 AAVE/day (10.09% to 6.10% APY)(high)
- Reduce maximum slashing percentage from 20% to 10% for both stkAAVE and stkABPT(high)
Notable concerns
- stkABPT yield reduction from ~12% to ~8% is material despite improved risk profile
- stkABPT liquidity pool TVL may be affected by the emission reduction, though current utilization metrics suggest the pool has sufficient liquidity
Generated by Kvorum
02Description
Simple Summary
This publication outlines the next incremental reduction in AAVE emissions being distributed to stkAAVE and stkABPT holders.
Motivation
stkAAVE
The current stkAAVE yield is 3.95% and represents 19.33% of Total AAVE supply with 22,675 unique users, up from 20,023 on the 5th June 2025. Since early April AAVE deposits in stkAAVE have been gradually increasing and only 3.82% of stkAAVE in cooldown, indicating stkAAVE has achieved an equilibrium with only minor flows in and out of the contract.
Over the last 30 days, an additional 43,664 AAVE has been deposited into stkAAVE, with 26,595 deposited on the 7th June, two days after the Umbrella upgrade went live.
Given the strong support for stkAAVE over the 30 day period since Umbrella went live, exceeding our expectations, this publication proposes the next reduction in Slashing Risk and AAVE emissions.
By reducing Slashing from 20% to 10%, the risk exposure is reduced by half. With an improving risk profile, the AAVE emissions are to be revised lower to 260 AAVE/day, or 3.25% at current deposit levels.
stkABPT
Since the Umbrella upgrade went live on the 5th June 2025, when stkABPT emissions reduced from 240 AAVE/day to 216 AAVE/day, only 51,217 BPT tokens, or 8.21% of the liquidity has been withdrawn from the Balancer liquidity pool. The vast majority of the withdrawal volume was by a single user that withdrew 50k units on Jun-06-2025. Otherwise, the number of unique users remains unchanged with a net reduction of 2 users over the last 30 day period.
With only 1.25% of stkABPT in Cooldown, it indicates an equilibrium has been achieved, and we are now well placed to revise the AAVE emissions. Reducing the Slashing exposure from 20% to 10%, improves the overall risk profile of holding stkABPT. A new guidance of 8% total yield for holding stkABPT is proposed comprised of 0.55% wstETH yield, 1.35% swap fee derived yield and 6.10% in AAVE emissions.
Whilst this represents as material change from ~12% to ~8% total yield, the liquidity pool contains generous levels of liquidity relative to swap volume passing through the pool. Utilisation of liquidity, Swap Volume / Pool TVL, remains mostly unchanged with 91.4% of swaps being $40k USD or smaller in size relative to a $211M TVL liquidity pool. A reduction in pool TVL is not likely to impede the pool's ability to attract swap volume.
Specification
Reduce AAVE Emissions in the following manner:
| SM Category | Current | Proposed |
|---|---|---|
| stkAAVE | 315/day (3.94% APY) | 260/day (Est. 3.25% APY) |
| stkABPT | 216/day (10.09% APY) | 130/day (Est. 6.10% APY) |
Update maximum slashing percentage for both to 10%.
References
- Implementation: AaveV3Ethereum
- Tests: AaveV3Ethereum
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal follows Aave's standard governance pattern: the only decoded on-chain action is a generic execute() call to a payload contract address. This is consistent with how Aave DAO proposals are structured — the actual logic (emission rate changes, slashing parameter updates) lives inside the immutable payload contract's bytecode, not in the top-level calldata visible here. The referenced GitHub implementation link corresponds to a contract named 'AaveV3Ethereum_SafetyModuleEmissionUpdate_20250721', which matches the description's subject matter (stkAAVE/stkABPT emission and slashing updates). However, because the decoded action only shows a fallback/execute() call with no arguments, I cannot directly verify the specific numeric parameters described (315->260 AAVE/day, 216->130 AAVE/day, 20%->10% slashing) against the raw calldata. There is no evidence of a mismatch, but there is also no way to confirm the exact values from the calldata alone. Given the structural consistency with known Aave governance patterns and no red flags (e.g., no unexpected target addresses, no value transfers, no extra actions), I assess this as consistent, but with low confidence since the decoded calldata does not expose the granular parameters needed for full verification.}
Generated by Kvorum
04Actions
- Target
- 0x341b…0d00
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
No forum thread is confidently linked to this proposal.
08Similar proposals
- aaveexecuted[ARFC] Safety Module & Umbrella Emission Update90%
- aaveexecutedLower stkABPT Emissions90%
- aaveexecutedReduce Safety Module Emissions89%
- aaveexecutedAmendSafetyModuleAAVEEmissions89%
- aaveexecutedstkABPT Emission Update88%
- aaveexpiredAmendSafetyModuleAAVEEmissions88%
- aavecanceledstkABPT Emission Update88%
- aaveexecutedstkAAVE Emissions Update85%
- aaveexecutedSafety Module Emissions Update85%
- aaveexecutedSafety Module stkAAVE - Re-enable Rewards84%