In September, 2020, the Aave Protocol began the initial phase of the Aavenomics.
In this genesis phase, $AAVE holders could stake their AAVE in the Safety Module and earn Safety Incentives, but stakers didn’t have the additional responsibility of securing the protocol as stake slashing was not yet activated.
The Safety Incentives for the OG Aavenomics were set at 400 AAVE/day to be distributed among all the stakers.
2020 came to an exciting close with the release of Aave Protocol V2, and as 2021 came and the first-quarter set in, community discussions and consensus proved that it was time to have a formal proposal and vote to upgrade the Aavenomics.
On January 6, a new Aave Improvement Proposal (AIP) for the Aavenomics Quarterly Upgrade went to the governance vote, and after a 24 hour validation period, it’s been officially executed. AIP-7 officially activates slashing and increases the Safety Incentives to 550 AAVE/day (a whopping 37.5% raise!!!)
AIP-7 sets the maximum slashing amount to 30%. In the case of a huge shortfall event, stakers could lose up to 30% of their stake to cover the deficit.
With the introduction of slashing, stakers are taking on more responsibility and risk to secure the protocol. Thus, it is only natural that the “Safety Incentives” or rewards for stakers increase as well, from 400 AAVE/day to 550 AAVE/day!