Question 1

What is Staked Aave (stkAAVE)?

Accepted Answer

Staked Aave (stkAAVE) is an ERC-20 token representing AAVE tokens staked in Aave's Safety Module. By staking AAVE, users receive an equivalent amount of stkAAVE, which accrues Safety Incentives over time. This mechanism enhances the protocol's security by providing a reserve that can be utilized in case of a shortfall event.

Question 2

What is Staked Aave (stkAAVE) used for?

Accepted Answer

* **Protocol Security:** stkAAVE contributes to Aave's Safety Module, acting as a backstop in the event of a protocol deficit. Up to 30% of staked assets can be slashed to cover such shortfalls. 
 
* **Earning Rewards:** Holders of stkAAVE earn Safety Incentives, distributed in AAVE tokens. These rewards are determined by Aave Governance and can be claimed at any time. 
 
* **Governance Participation:** stkAAVE holders possess voting rights within the Aave Governance framework, enabling them to influence protocol decisions. 
 
* **Borrowing Discounts:** Staking AAVE to receive stkAAVE can provide discounts on borrowing rates for Aave's GHO stablecoin.

Question 3

Who created Staked Aave (stkAAVE)?

Accepted Answer

stkAAVE is issued by the Aave Protocol, a decentralized finance platform founded by Stani Kulechov. The protocol is developed and maintained by Aave Labs and governed by the Aave DAO. The Safety Module, which includes stkAAVE, was introduced to enhance the protocol's resilience against potential shortfall events.