Hi all,
I’ve been thinking about the 50/50 split between StkAAAVE and BPT. In short I for one find it difficult to justify it.
Lets say that StkAAVE vs BPT staking proportions end up being 80/20 then it creates an unfair reward distribution for StkAAVE stakers, as they absorb most of the SM risk and only 50% of daily AAVE distribution. An inverse scenario would mean the same for BPT stakers.
Clearly these risks profiles are not the same in the full picture, however I do believe that when it comes to safeguarding the SM every staked token should benefit from rewards pro-rata. Thus, both BPT and StkAAVE participants should have access to one pool of rewards and receive them proportionally to the value of their stake.
Another noteworthy fact is that Balancer smart contract BPT risk is being fairly covered by the Balancer distribution as well as the trading fees.
I also agree with raising the total rewards to 1100 AAVE/day as the SM needs more staked volume, but not with the 50/50 split. Also the idea of having tranches of risks in the future is very interesting. For example there may be pools for those who are prepared to lose even 100% of their stake in an emergency for higher rewards of course. In that scenario the split would make sense. In the current one, it is unnecessary and potentially detrimental to either StkAAVE or BPT as we cannot ascertain whether their respective shares will end up being 50/50 of the total staked volume, nor is it imperative that they end up hovering along those lines long-term.