AmendSafetyModuleAAVEEmissions
01Summary
Reduce AAVE Safety Module emissions by 30% (from 1,100 to 770 AAVE/day) and implement a 90-day emission cycle. This lowers stkAAVE APR from 6.87% to 4.81% and B-80AAVE-20wETH yield from 14.35% to 10.05%, saving the DAO approximately 120,450 AAVE annually while a broader Safety Module upgrade is developed.
- Type
- parameter change
Key changes
- Reduce AAVE emissions to stkAAVE from 550 to 385 AAVE/day(high)
- Reduce AAVE emissions to B-80AAVE-20wETH from 550 to 385 AAVE/day(high)
- Implement 90-day Safety Module emission schedule cycle(medium)
- Expected stkAAVE APR reduction from 6.87% to 4.81%(high)
- Expected B-80AAVE-20wETH yield reduction from 14.35% to 10.05%(high)
Notable concerns
- This 30% reduction is less aggressive than Llama Part IV proposal which suggested 75% reduction to stkAAVE
- Xenophon Labs recommended 80 AAVE/day reduction with doubled slashing rate from 30% to 60%, but this proposal does not amend slashing rate
- B-80AAVE-20wETH Balancer v1 pool requires future migration to Balancer v2 which may necessitate further emission revisions
- Annual cost per dollar of coverage increases from $0.23 to $0.16 under this proposal versus current state
Generated by Kvorum
02Description
Simple Summary
This publication proposes reducing AAVE (Safety Incentives) distributions to the Safety Module (SM) by 30% and introducing a 90-day SM emission cycle.
The SM serves as the Aave Protocol’s self-protection smart contract. The Aave Protocol distributes 1,100 AAVE daily, split evenly across AAVE and B-80AAVE-20wETH deposits.
Future proposals shall discuss the composition and aim to improve the overall capital efficiency of the SM. However, this publication intends to reduce AAVE emissions in the immediate future, saving the DAO valuable AAVE emissions while the broader SM upgrade is being advanced. It is widely accepted within the community that Aave DAO is overpaying for AAVE and B-80BAL-20wETH deposits.
This publication proposes reducing AAVE emissions by ~30%. The revised AAVE emission is to be reduced from 1,100 AAVE/day to 770 AAVE/day. This represents a 330 AAVE/day reduction. The APR for stkAAVE holders is expected to reduce from 6.87% to 4.81%. Similarly, for the B-80BAL-20wETH deposits, yield is expected to fall from 14.35% to 10.05%.
Please note that the 80AAVE/20wETH Balancer v1 pool is to be migrated to Balancer v2 in the future. This will present the community with an opportunity to further revise the AAVE emissions. It may also occur at a time when the DAO has vlAURA and/or veBAL at its disposal.
For context, the Llama Part IV SM Upgrade suggests reducing the AAVE emission to stkAAVE holders by 75%. This is because slashing for stkAAVE is to be reduced, additional assets are to be added to the SM, and the emissions are to be redirected to those newly added assets. Since this proposal was published, stkAAVE has also gained the utility of discounted GHO borrowing rates.
Similarly, Xenophon Labs recommended doubling the slashing percentage from 30% to 60% on the stkAAVE pool and lowering emissions by 80 AAVE/day, from 550 to 470. While this publication does not propose amending the slashing rate, the reduction in AAVE emissions is about double.
Specification
The implementation for this proposal will be prepared by ACI. The table below shows the current and proposed daily AAVE Emissions.
| Collateral | Current Emissions | Proposed Emissions |
|---|---|---|
| AAVE | 550 | 385 |
| B-80AAVE-20wETH | 550 | 385 |
Transition to a 90-day period SM Emission schedule.
A comparison between Xenophon Labs’ proposal and this proposal for stkAAVE holders is shown below:
| TVL | Slashing Rate | Protection | AAVE/day | AAVE Price | Annual Spend | Annual Cost per $ of Coverage | Deposit Yield |
|---|---|---|---|---|---|---|---|
| $175.0M | 30% | 52.5M | 550 | $60.00 | $12.045M | $0.23 | 6.88% |
| $175.0M | 60% | 105.0M | 470 | $60.00 | $10.293M | $0.10 | 5.88% |
| $175.0M | 30% | 52.5M | 385 | $60.00 | $8.431M | $0.16 | 4.82% |
References
- Implementation: AaveV3Ethereum
- Tests: AaveV3Ethereum
- Snapshot
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal description makes specific, verifiable claims: reducing AAVE emissions to the Safety Module by ~30% (550→385 AAVE/day for each of two pools) and moving to a 90-day emission cycle. However, the only decoded on-chain action is a bare `execute()` call (decoded as a generic fallback) to a single target address, with no arguments or internal calls surfaced. This is typical of Aave's governance pattern where a proposal executes a payload contract whose internal logic (setting emission per second, updating distribution end times, etc.) is not exposed in the top-level calldata trace — it would require decoding the payload contract's bytecode/source (linked in the References section) to verify the exact numbers. Because the calldata given to us contains no parameters to check against the 385 AAVE/day figures or the 90-day cycle length, I cannot confirm or refute the specific numeric claims. There is no evidence of contradiction (no mismatched target, no extra transfers, no unrelated calls), so I do not flag any discrepancy, but confidence in this conclusion is low because the decoded action set is too shallow to substantively verify the description's quantitative claims. A careful reviewer should independently verify the linked payload source code matches the stated 385 AAVE/day and 90-day cycle before relying solely on this analysis.
Generated by Kvorum
04Actions
- Target
- 0x8ef5…4caf
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
| Voter | Choice | % of total | Rationale | ||
|---|---|---|---|---|---|
| 320x329c…3ed4 | For | 108.9K | 26.96% | — | 3y ago |
| 230x2331…7e73 | For | 60K | 14.85% | — | 3y ago |
| 2C0x2cc1…4df1 | For | 43.7K | 10.81% | — | 3y ago |
| B90xb933…8dd1 | For | 42.4K | 10.49% | — | 3y ago |
| EA0xea17…6676 | For | 38.7K | 9.59% | — | 3y ago |
| EZezr3al.eth0x8659…7d0e | For | 38.1K | 9.43% | — | 3y ago |
| 570x57ab…2922 | For | 27.3K | 6.76% | — | 3y ago |
| 870x8787…ea52 | For | 21.2K | 5.25% | — | 3y ago |
| E40xe459…e666 | For | 20K | 4.95% | — | 3y ago |
| 180x1855…98ba | For | 3.6K | 0.89% | — | 3y ago |
| DF0xdf06…4977 | For | 27.3 | 0.01% | — | 3y ago |
| D40xd4b2…3a4f | For | 2 | 0.00% | — | 3y ago |
| C70xc754…9905 | For | 1.5 | 0.00% | — | 3y ago |
| 570x5762…a752 | For | 1 | 0.00% | — | 3y ago |
| 820x82ea…1fcc | For | 0.5 | 0.00% | — | 3y ago |
| 970x9748…1999 | For | 0.2 | 0.00% | — | 3y ago |
| 6F0x6f07…5666 | For | 0.2 | 0.00% | — | 3y ago |
| F00xf010…9132 | For | 0.1 | 0.00% | — | 3y ago |
| 040x04a8…be71 | For | 0.1 | 0.00% | — | 3y ago |
| 250x259c…4dde | For | 0.1 | 0.00% | — | 3y ago |
| CF0xcf7a…30b6 | For | 0 | 0.00% | — | 3y ago |
| AB0xab88…fe76 | For | 0 | 0.00% | — | 3y ago |
| 420x423b…a7f6 | For | 0 | 0.00% | — | 3y ago |
| FE0xfee0…1e7a | For | 0 | 0.00% | — | 3y ago |
| 730x739d…c11e | For | 0 | 0.00% | — | 3y ago |
07Forum
No forum thread is confidently linked to this proposal.
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