Simple Summary

This proposal reduces Safety Module emissions and adjusts parameters for stkAAVE and stkAAVE/wstETH BPTv2, saving a combined 29,200 AAVE/year (~0.18% of total supply, ~$3.6M) while transitioning stkAAVE/wstETH BPTv2 toward sunset in favour of Protocol-Owned Liquidity.

Motivation

The general theme over the last 6 months has been to reduce AAVE emissions by shifting towards direct AAVE/ETH provisioning and ensuring future emissions are more sustainably funded via the buyback program.

stkAAVE: The current 260 AAVE/day yields 3.69% for stkAAVE holders. The module continues to demonstrate healthy participation at 16.78% of AAVE supply staked, with strong net inflows (+98,600 in January 2026, +60,100 in February 2026). The previous reduction from 315 to 260 AAVE/day did not trigger an exodus. Reducing to 220 AAVE/day results in a 3.12% APR, continuing the proven downtrend (385 → 360 → 315 → 260 → 220). The cooldown reduction from 7 to 2 days makes stkAAVE more liquid and suitable for integrations such as CEX Earn programs and futures markets.

stkAAVE/wstETH BPTv2: With the Aave Finance Committee (AFC) receiving additional funding via AIP 449, additional AAVE/wETH liquidity is to be deployed that allows stkAAVE/wstETH BPTv2 to be sunset, resulting in a cost savings of 14,600 AAVE/year. By replacing the inefficient full-range 80/20-weighted pool with concentrated liquidity, the Aave DAO can facilitate swaps more capital-efficiently. Umbrella rollout provides targeted, capital-efficient protocol protection, reducing the legacy need for stkAAVE/wstETH BPTv2 as a Safety Module mechanism.

Specification

Combined annual emission savings: ~29,200 AAVE (~0.18% of total supply, ~$3.6M).

References

• Implementation: AaveV3Ethereum
• Tests: AaveV3Ethereum
• Snapshot
• Discussion

Copyright

Copyright and related rights waived via CC0.