Open Source Liquidity Protocol

We propose a SAFEty Module - a Staking module for SAFE tokens and SAFE LPs to add more security to the Safe Protocol and earn Safety incentives.

What Stakers would provide and risk

• Stakers could either stake SAFE or a 80% STAKE / 20% ETH token
• In the case of a shortfall event, up to 30% can be slashed.
• Unstake queue of 14 days.

What Stakers would receive in return

• A base amount of SAFE incentives
• Potential additional SAFE rewards based on program success / income

Uses of the SAFEty Module The Safety Module would protect the users from Safe Protocol security incendents

• Allow users to either pay a yearly fee or Stake an x amount of SAFE for a specific duration in order to earn different tiers of coverage.
• Coverage could be segmented based on max assets covered (Up to 10k, Up to 100k, Up to 500K) and could follow the bank deposit guarantee model.
• Allow protocol to get a discount on Coverage costs if they purchase “bulk” insurance - e.g. a Yield Protocol could include the SAFEty Module coverage in their dApp at a 20% discount to individuals.

Comments Lavi

Aave Safety Module

The Aave SM is designed to cover shortfall events from smart contracts, liquidations, or oracle risks. It's used to refund lenders in case a market acquires bad debt. stAAVE or staked BPTs (AAVE/ETH) get auctioned off to refund the bad markets. Up to 30% is sold. They can mint new AAVE, if the 30% isn't enough. So lenders are covered by Aave stakers. In addition, there's also a reserve fund that they can tap into.

In return for putting AAVE into the SM, stakers get rewarded with protocol fees, AAVE tokens. BPT stakers get additional trading fees plus BAL tokens. Stakers also get a freely moveable tokenized position in stAAVE