[TEMP CHECK] Safety Module Upgrade Part III - Enable gauges on BPT in Safety Module (smBPT)

[John_TV_Locke]

This is an interesting strategy for AAVE liquidity/utility, if that is needed.

For the Safety Module, complexity is unlikely a good risk/reward. I don’t think staking the BPTs in Aura reduces liquidity bc you can withdraw them, and I’m a big fan of what they are building, but for the safety module it certainly adds complexity, cost, and risk.

@Llamaxyz

However, if Aave’s SM was to accept the BPT directly and not deposit the BPT into the Balancer Gauge. Any users could deposit & stake their BPT to receive BPT-gauge without depositing in the SM, allowing them to bypass the SM lock period and cooldown to receive the same incentives as SM depositors, so classic gauges invalidates the strategy

this is a great risk/concern to point out, and the “smBPT gauges mechanism” is a very nifty solution to it.

@Llamaxyz

In Part IV, the SM upgrade proposal will consider using 75% of the current incentives budget for volatile & stable BPTs categories. That’s 825 AAVE/ day that could either be used to incentivize the pools directly (Not recommended to keep doing liquidity mining for all categories) or to create vote incentives for the associated gauges driving a higher rewards value to the pools.

If the bribing solution is favored we can/should do some analysis on efficacy and sustainability.