Aave Companies Proposes Integration with Balancer, Accepting Balancer BPT as Collateral

Aave Companies released a proposal in Aave DAO, proposing to implement a new primitive called "Staked aTokens", which would allow Aave to participate in Vote-Escrowed economies. 

The proposal would allow for the use of LP tokens from ve-based protocols, like Balancer or Curve, as collateral while participating in those protocols' ecosystems. LP tokens are locked at their corresponding gauges, producing increased rewards that are distributed to LP token suppliers to Aave.

The proposal advised Aave to integrate with Balancer first, and to accept BPT (Balancer Pool Tokens) as collateral. To execute the proposal, Aave Companies would deploy a smart contract named BalancerVeRouter, which would allow Aave Governance to turn BPT into $veBAL, participate in the gauge weight voting, and claim Balancer Protocol revenue directly within the Aave DAO Treasury. The revenue would be distributed to BPT providers so that they could get increased rewards.

The proposal is currently in discussion, which will be followed by a vote by Aave DAO. In addition, the proposal also needs to be approved by Balancer DAO to be executed.