DeFi protocol Aave hands over governance rights to token holders

Aave has transferred its governance rights to the token holders. It has relentlessly been testing its decentralized governance model since July.

By · Oct 30, 2020 . 6min read

DeFi Aave hands over governance rights news

Aave, a decentralized finance (DeFi) project, has transferred the protocol’s governance rights over to its AAVE token holders. Thus, allowing the community to manage the fate of the network. Aave is one of the fastest-developing DeFi protocols. It brings enhanced composability and productivity for end-users.

It recently announced that the admin keys of the protocol are now transferred to the governance communities. Moreover, this migration is under the control of its LEND utility token holders. The DeFi project has long maintained that it intends to allow the decentralized community to make decisions on behalf of Aave. In context to Aave’s V2 transition, the decentralized money market has given decision making to its token holders via the “genesis governance” framework. 

The handover reflects months of experimentation and tweaking to assure governance decisions would render changes on-chain. Aave has been trialling its decentralized governance model from July to ensure a smooth rollout. Its governance tokens were initially distributed in a November 2017 token sale that raised approximately $18 million for the development of the protocol.

Aave Community voted in support of launching migration functionality.

The Aave community decided in favour of the first Aave Improvement Proposal (AIP). Thus, allowing the launch of the migration functionality of its utility token LEND to its new AAVE token at a rate of 100:1. Thus, giving the governance rights to its token holders. The AIP scheme also decreases transaction fees for token holders. Additionally, it allows users to transfer debt among different currencies and swap loan collateral without paying the loan.

The fifth-largest DeFi protocol by TVL.

In a short span, Aave has developed as one of the top DeFi projects. It has seen some massive success by the middle of this year as there has been a vast surge in the DeFi sector lately. Recently, the protocol is enduring more than $980 million. Hence, it has become the fifth-largest DeFi protocol by the total value locked (TVL). Although it is among the top five DeFi protocols at the moment, yet it has seen a slump as contrasted to the high of August 2020. Moreover, during that time, its TVL was about $1.7 billion, which is 42% more than what it currently is.

Follow Cryptodose for more updates.

Share
       
         All News