This is an interesting perspective and thanks for this comment.
Regarding the following
```I would also note (this is not an accusation) that it could be interpreted that AAVE is attempting to supplement it’s stakers’ falling APY at the expense of BAL LPs, instead of at the expense of it’s existing token holders / token model, especially considering that this is something of an insurance fund. So I would advise caution on the optics here.````
It’s true that the AAVE APY is falling, mostly because the pool is becoming huge. You would agree with me that a bigger pool produces many advantages for Balancer, in terms of pure TVL, volume generated and revenue, which all contribute to put in better perspective Balancer as a protocol and BAL as a governance token. By implementing proof of liquidity, the Safety module could become the most important entry point to trade AAVE, which would be amazing given its trustless and decentralized nature and give huge exposure to balancer. AAVE has a trading volume of > 500M a day.
This doesn’t mean i don’t understand your point - being a zero sum game, there are different forces in place.
Further to this point; for all I know higher cap AAVE LPs might have no interest in BAL governance and sell their tokens frequently to lock in gains, potentially causing downwards price pressure. If AAVE is uncapped and those LPs begin pulling in more BAL and selling them regularly, this would be at my expense. So, I would consider Balancer (as a community) to have acted against its own interests and begin to reconsider my position.
Fair point, but i don’t understand why this reasoning would be different for AAVE than any ETH or WBTC holder. Actually given the ongoing collaboration between the two communities, the exact opposite can be true as well.
but I would also suggest that AAVE may need to reconsider the proposed concessions to Balancer / BAL LPs if they wish to move to uncapped in the near future.
Could the Balancer and AAVE dev teams perhaps collaborate to implement some kind of option to stake BAL/WETH BPT against the AAVE Safety module? (just putting my thoughts into text)
The AAVE/ETH step was part of the Aavenomics proposed in Q3 last year by the genesis team and voted by the community. This has now been executed, and how to proceed from here is up to the community. Technically speaking, the safety module has the capability of supporting any asset/LP share, including BAL/ETH - and there was discussion in the governance forum regarding derisking AAVE in the safety module by adding other assets. Would be great if you could start brainstorming about this in our governance forum!
Edit: Also, I would note that aBPT stakers aren’t afforded Governance voting power as it stands. Will this be addressed?
Yes, the last step from here is giving back gov power to stkaBPT holders by submitting a proposal to the aave governance.