This proposal also appears on Balancer's forum. If approved, changes would take effect at 00:00 UTC on Monday, March 8.

This is a proposal to raise the liquidity mining cap from $100M to uncapped for $AAVE

The Proposal

After the activation of the Balancer Based Safety Module 20 Days ago, the liquidity for $AAVE quickly grew to be the Largest Balancer protocol Liquidity Pool as new LPs join the AAVE/BAL incentivized Safety Module.

Current APY by staking in the Safety Module is 29.34%, only considering the AAVE rewards, The Pool is still growing and Balancer is now the best protocol to swap AAVE onchain.

As BAL is a collateral option in Aave, aBPT stakers can use their BAL rewards to unlock more borrowing power in the Aave Protocol.

Uncapping the BAL rewards for the AAVE/ETH pool will allows even further incentive to bring more liquidity onchain and increase the synergies between the Aave & Balancer protocols.

What is The Safety Module?

The Aave Safety Module acts as a collateral for the whole Aave ecosystem. AAVE holders, and now - with the new Balancer Based Stake - AAVE/ETH holders benefit from long term rewards for securing the protocol from insolvency, while at the same time bearing the risk of being slashed in case of shortfall events. Having a very liquid onchain market and a consistent capital allocated in the Safety Module greatly increases the safety of the Aave ecosystem and the Aave protocol liquidity providers.