Aave Governance is officially on mainnet, giving the decisional power to the community! Now it’s time to vote on the very first Aave Improvement Proposal (AIP) for the token migration from $LEND to $AAVE.
Thread on how to vote
Blog post for details: https://t.co/Z09ajBmb2Y
— Aave (@AaveAave) September 25, 2020
This milestone comes as a huge next step for the project, with tokenholders voting to ratify a token migration that implements the Aavenomics changes including staking incentives, yield farming, and a backstop module on top of decentralized governance.
Detailed in the AIP is the implementation of new Safety Incentives, or rewards to be earned from staking AAVE via a Safety Module as a reserve in the event of shortfalls. The proposal suggests 400 AAVE in rewards per day, good for roughly $20k in rewards each day when taking the 100 LEND > 1 AAVE swap into account.
Outside of the 100:1 tokenswap, AIP1 adds a 3M token Aave Reserve to a community governed treasury, good for Safety and Ecosystem Incentives in tandem with a fortitude of other rewards programs to come.
In the event the proposal passes, the Safety Module will be introduced using a bootstrap period with no slashing, making staking completely risk free to early adopters. There is currently no deadline on when LEND would have to migrate, however, those who are the first to stake to the Safety Module stand to earn the largest portion of the first day’s 400 AAVE rewards.
100 unique participants have voted on the proposal in the first 48 hours of launch, with early support signaling the proposal will pass in spades.
What’s unique about Aave governance is that voting is built directly into the application, utilizing a custom dashboard and governance module built directly by the Aave core team.
Lending Governance Thrives
When it comes to DeFi governance, we’re seeing an ongoing trend of token distribution proposals have the highest engagement to date.
With Aave, governance marks the start of new trends like adding new assets, adjusting interest rate models, and adding new money markets in line with core protocol upgrades like the token migration.
If one thing is for sure, Aave has solidified as a crucial foundation of the DeFi ecosystem. The migration to AAVE is set to kick off Aave V2, adding in a suite of gas optimizations that are sure to take the sector-leading protocols to new highs in the coming months.
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