Victor Ugochukwu · Dec 14, 2020 . 5min read
Aave Governance goes live on Mainnet, continues path to Decentralization
Through its first governance Aave Improvement Proposal on mainnet, it migrates from the LEND token to the AAVE token
By Victor Ugochukwu · Sep 28, 2020 . 6min read
DeFi super protocol Aave has released its first governance Aave Improvement Proposal on mainnet and it is to migrate from the LEND token to the AAVE token. It published a blog post announcing mainnet release after successfully running on Kovan and Ropsten testnets.
Aave has had such an impressive run in 2020 where it became the first DeFi token ever to reach $1 billion in market cap. As well, it ranked tops on DeFi Pulse in TVL locked. With Aave governance now debuting on mainnet with LEND to AAVE migration, it’s galloping full speed to decentralization which it says has always been its primary goal.
Aave published its Aavenomics Flash Paper in July dishing out details on how the protocol will transition fully to a decentralized protocol. And the first move towards is to migrate the LEND token to AAVE. Subsequently, for its Genesis Governance Vote AIP1, LEND, and aLEND holders can cast their votes on the Aave app. Once the voting time lapses with more people voting in support, then post-migration AAVE holders can stake their AAVE in a Safety Module (SM). By doing this, they earn AAVE as a Safety Incentive (SI) in exchange for securing the protocol. Aave is also considering adding a percentage of protocol fees to SI. However, this will only happen if the community approves of it through voting. After all, its the whole essence of decentralization and why Aave ceded control by allowing governance on mainnet.
And later, Aave will be adding a feature where users can stake plain AAVE, along with an AAVE/ETH pair. This is when it finally integrates the Balancer protocol, whereby users can earn BAL and trading fees. Of course, voters will be ones to decide the incentives through voting.
Aave has achieved several milestones this year, activating governance on mainnet is another heads up for the team
As earlier pointed above, Aave has had a good run this year. LEND, its native token soon to transition to AAVE went from $0.0078 in January to $0.82, its ATH in August.
Interestingly, Aave has built features like Flash Loan, which is now being copied several other protocols. Still, in its innovative approach, it released a Credit Delegation feature which allows Aave depositors to deposit into the protocol’s smart contract and then delegate their credit lines. This is already spinning off other derivatives product as we see in CDS contract in Opyn protocol.
And more recently, the team obtained Electronic Money License from UK regulators for Eurozone expansion.
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