Following the recent launch of Aave V2 last week and a successful start with $36 million TVL, the core developers have decided to showcase the next steps for governance. Aave reveals that the proposed governance model will enable users to control almost all aspects of their voting power, as well as use different tokens to vote.
After a month of development and voting, Aave finally launched Protocol V2 last week. During that period users have already locked more than $35 million in collateralized assets, marking exponential growth for Aave. Now that the stage is set for Aave V2, the team reveals a new set of features that will change the governance model.
From now on, users will have the ability to separate proposal power and voting power when delegating votes. The change should radically improve the governance model’s scalability. Furthermore, Aave discloses that community members can relay their voting power to another entity or even to another individual user.
The developers have decided to implement these changes as they believe that some voters may not have the technical knowledge to assess proposals.
Therefore, it might be more beneficial to relay the voting power of certain holders to individuals who might be more acquainted with Aave. We do note that this is not an enforced rule. Users are still free to choose on their own if they wish.
Apart from the AAVE and stkAAVE tokens, holders can now also propose to extend voting rights to other forms of AAVE tokens as well.
Aave V2 introduces two governance ‘executors’
The most notable change may be the inclusion of several governance executors in Aave V2. These entities manage different sections of the ecosystem and impose different requirements for consensus and security. For the time being, developers plan to include two executors with one having a short timelock and the other having a long timelock.
Developers share an example of how changes brought to the AAVE token itself has a higher impact on the overall ecosystem. Therefore, a governance proposal targeting the native token would require far higher levels of consensus in order to be passed.
Under the current layout, the first executor controls V1 and V2 risk parameters, V1 token distribution, and V1 collection fees. On the other hand, executor number two manages the ‘upgradeability’ of AAVE and stkAAVE tokens. The second executor is also the only entity that manages V2 governance parameters.
The community currently discusses the proposed changes on the protocol’s official governance forum. Once everything is fully acknowledged, the team will set up a governance proposal on which AAVE holders can vote on.
As Defiye reported last week, Aave finally launched V2 with a live mainnet. To summarize, the upgraded version brings many new changes to collateral, flash loans, and gas fees.
Developers have created a new form of flash loans called ‘batch flash loans’ which enable users to create a loan for multiple assets. Furthermore, they claim that a new system enables 50% lower gas fees. AAVE reacted unsurprisingly well to the news, rising from $82 to $92 following the launch.