Aave founder reveals the effectiveness of the Umbrella stake module: the transformation of the staking system aids in Risk Management.

AltcoinDetective · 2025-06-08T11:25:26+00:00

Aave founder Stani Kulechov stated that the impact of the new Aave staking module Umbrella has already manifested, with the Aave protocol shifting from using AAVE as the ultimate excess debt support to leveraging additional earnings generated from aTokens provided by users staking through Umbrella. Additionally, the Aave DAO can configure a predefined coverage amount for each staking pool, serving as the first line of defense for staker funds, balancing the reduction of protocol risk without cutting any AAVE by allowing both users and the Aave DAO to mitigate risks. Aave V4 will introduce more Risk Management features, prioritizing user safety over risk-bearing and tail risk accumulation, unlike other protocols.

AltcoinDetective

2025-06-08 11:25:26

Stani Kulechov, founder of Aave, said the impact of the new Aave staking module, Umbrella, is already being felt, and the Aave protocol is moving from using AAVE as a last resort to generating additional yield using aTokens provided by users through Umbrella staking. In addition, the Aave DAO can be configured with a predefined covered amount for each staking pool, which in turn acts as the first line of defense for stakers’ funds, mitigating protocol risk by both the user and the Aave DAO without cutting any AAVE to achieve balance. Aave V4 will introduce more risk management features, and the community will still prioritize user safety compared to other protocols that focus on taking risks and increasing tail risk.

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