Safe Borrowing Rewards Program

Voting ended over 4 years agoSucceeded

Rationale: The liquidity mining program has resulted in a large increase in recursive borrowing. This activity is mostly non-productive to the protocol and takes up a large percentage of the rewards budget. This proposal is aimed to discourage unnecessary leverage and encourage users to be mindful of their liquidation risk.

Proposal: Allocate an amount of stkAAVE from the ecosystem reserve to incentivize AAVE users to maintain a high health factor. Distribute to users based on the following formula:

safeBorrowingRewards = userCollateral * rewardFactor where reward factor is a normal distribution centered at a health factor of 2

Discussion: https://governance.aave.com/t/arc-extend-aave-liquidity-mining-rewards/4852

Off-Chain Vote

In favor of program

10.78K 98.8%

Not in favor of program

127.8 1.2%

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Timeline

Jul 27, 2021Proposal created

Jul 27, 2021Proposal vote started

Aug 03, 2021Proposal vote ended

Oct 26, 2023Proposal updated