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What is Safety Module (Aave)?

Crypto Terms Glossary: What is Safety Module (Aave)?

Within the Aave economic framework, the Safety Module is a specialized security feature designed to mitigate the potential effects of an unexpected drop-off in liquidity, which might otherwise substantially reduce the AAVE token's overall value. The Safety Module is built using the Balancer liquidity pool and allows for AAVE and ether (ETH) to be staked at a 4:1 ratio in order to earn rewards and vote on protocol changes. If necessary, up to 30% of the AAVE tokens staked in the Safety Module can be sold in order to provide liquidity to Aave.

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