I disagree. Staking AAVE has a different risk profile VS depositing it and borrowing against it.
Staking involved depositing AAVE into the Aave Safety Module (SM), this will soon enable a mechanism called “slashing.” What this implies is that, in a shortfall event, up to 30% of the current staked AAVE (stkAAVE) can be autonomously sold on the open market to cover depositors’ balances.
In other words, if deposited AAVE is staked, we need to re-evaluate its risk profile and take a significantly more conservative approach. Although I’m not a fan of this, there are ideas floating around about just implementing stkAAVE itself as collateral. Overall, thanks for starting a discussion about this!