Aave has taken a major step forward in Defi -risk management with the launch of umbrella, a completely unchain, automated system for covering protocol risk and unacceptability.
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Developed by BGD Labs and approved by Governance, Umbrella replaces manual governance intervention with smart contracts who manage risks in real-time while they use rewarding users who use their interesting supporting atokens such as AUSDC and GHO.
With this new system, users can continue to earn a yield on their deposited assets, while it also protects the protocol and earns extra rewards (such as Aave and GHO). In the case of a deficit, expanded atokens are automatically burned to compensate for the loss, creating a self -sufficient, efficient safety mechanism.
“Umbrella is an important step in the direction of completely autonomous, unchain risk management. It reinforces Aave’s vision on a safer, more resilient Defi -eco system.”
Stani Kulechov, founder of Aave Labs
How umbrella works
The architecture of umbrella consists of three main components:
Stakeetokens: Users can pack atokens or Gho, with a 20-day cooldown and a two-day withdrawal window.
Rewards Controller: uses dynamic, multi-token emissions (mathematically modeled) to optimize the incentives.
Umbrella -core: monitor Aave V3 Pools and performs automated oblique stripe during shortage events -no governance action required.
Setting is non-right and the risk is isolated for the specific assets and the chain-What means that setting AUSDC only exposes you to USDC pool risks.
Why it matters
Umbrella replaces the legacy safety module with a more capital efficient, automated and transparent system. Users can use the same atokens that they already have, making it easy to participate in risk management without extra complexity or assets.
This upgrade:
Eliminates delays in tackling bad debts
User stimuli votes on with protocol safety
Improves real-time, measurable risk response
Is spreading to the most sought after assets in Ethereum and other networks
“Umbrella represents a paradigm shift in Defi. It allows users to protect the protocol while they are in control of their assets.”
Ernesto Boado, co-founder of BGD Labs
Transition, rollout and what is the next step
The rollout of umbrella will be gradual, starting on Ethereum and expand to other networks over time. During this transition, STKAAVE and STKABPT remain active with Slashing eliminated until umbrella reaches sufficient scale. In the meantime, Stkgho is migrated to Savings Gho (SGHO) – a new option that removes cooldowns and the risk of lowering, while the yield continues to generate.
Users can interact with umbrella via the special stretch interface at the game.onaave.com. Governance will supervise network expansion, reward calibration and continuous optimisations.
Umbrella is built on the base of Aave V3.3, which introduced an essential infrastructure for following unresolved debts and improving the liquidation assanics – the groundwork for fully automated shortage resolution.
To guarantee safety and reliability, Umbrella has undergone four independent audits carried out by Certora, Mixbytes, Ackee Blockchain and @stermi, so that compliance with the rigorous security standards of Aave.
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About an Aave protocol
Aave is a decentralized liquidity protocol with which users can deposit, borrow yield and assets without intermediaries. Pasted by the Aave Dao, it also publishes Gho – an overcollateral, decentralized Stablecoin.
More information or participate in Governance on Governance.aave.com.