[ARFC] stkAAVE Emissions Update

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title: [ARFC] stkAAVE Emissions Update author: @TokenLogic created: 2026-05-20

Summary

This proposal restores stkAAVE emissions to reflect the targeted 2.75% staking APR, as mentioned in the https://governance.aave.com/t/aave-dao-funding-insights/24192.

Motivation

Overview

In line with the Aave DAO Funding Insights publication, this proposal recommends restoring AAVE emissions to target a 2.75% APR. Given that recent outflows are not expected to return, and with more than 30,000 stkAAVE balances currently in Cooldown, AAVE emissions should be revised downward to align with the 2.75% target rate.

This publication follows the prudent decision to pause the AAVE buyback program, facilitating the Aave DAO's redirection of capital to strengthen the balance sheet after donating 25,000 ETH to restore the backing of rsETH following the LayerZero exploit, and preparing to introduce an incentive campaign on the Ink Network in the near future.

Rationale for stkAAVE Emission Reduction

To date in Q2, four (4) large stkAAVE holders have withdrawn AAVE from the staking contract, resulting in the APR adjusting from 2.68% to 3.87%.

Image 1.jpg

Source: https://aave.tokenlogic.xyz/umbrella/stkaave

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Source: https://aave.tokenlogic.xyz/umbrella/stkaave

With an expected 32,593 AAVE to be withdrawn across four (4) addresses and slightly more than 35k AAVE currently in Cooldown, the yield is expected to increase towards 3.93% APR in the near future.

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Source: https://aave.tokenlogic.xyz/umbrella/stkaave

With reference to the Aave DAO Funding Insights publication, this proposal seeks to reduce AAVE emissions to align with the targeted 2.75% APR. After adjusting for recent and forecast near-term stkAAVE withdrawals, an emission rate of 150 AAVE/day is anticipated to achieve the targeted 2.75% APR. Reducing the AAVE emissions by 70 AAVE/day continues the recent trend of revising stkAAVE emissions lower, as shown in the table below.

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Source: https://aave.tokenlogic.xyz/umbrella/stkaave

The impact upon AAVE emissions is shown below:

Metric	Current	Proposed	Delta
Emission Rate (AAVE/day)	220	150	(70)
Annualised Emissions (AAVE)	80,300	54,750	(25,550)
Annualised Spend (At $90/AAVE)	~$7.2M	~$4.9M	($2,299,500)
stkAAVE APR	3.30%	~2.75%	(80) bps

Specification

The stkAAVE emission rate is to be updated as follows, with no other Safety Module parameters modified by this proposal.

Parameter	Current	Proposed
stkAAVE Emission Rate	220 AAVE/day	150 AAVE/day
stkAAVE Target APR	3.30%	~2.75%

The change aligns the cost of stkAAVE emissions with expected participation levels and reduces annualised stkAAVE emission spend by approximately $2,300,000 at $90/AAVE.

Disclaimer

TokenLogic is an active service provider to the Aave DAO, the beneficiary of stream 100072 and the KPI as outlined in this publication. The scope of this engagement is available via this forum proposal.

TokenLogic supports and maintains an independent delegate voting platform within the Aave community.

TokenLogic and associated entities have no undisclosed material conflicts of interest at the time of submission.

Next Steps

Gather feedback from the community.
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