The journey towards decentralization continues with the release of the Aave Governance on mainnet! Decentralization is the Aave ethos, and the goal was always to give the decisional power to the community. For a more detailed view of the governance process, check out the Aavenomics Flash Paper.
Previously, the governance was on the Kovan and Ropsten testnets, where you could trial voting on Aave Improvement Proposals (AIPs). We also had a signalling poll for the token migration proposal, and the voting results were overwhelmingly in favor. Now, it’s time to take it further and vote on the first AIP, this time for real!
Voting for the very first AIP is now live! AIP1 is the proposal to migrate from the LEND token to the AAVE token, making it the new governance token of the Aave Ecosystem. LEND and aLEND holders can all head over to the DApp and vote.
If the vote is in favor of the token migration, then post-migration AAVE holders will be able to stake their AAVE in a Safety Module (SM) and earn AAVE as a Safety Incentive (SI) in exchange for securing the protocol. Later, a percentage of protocol fees may also be added as a SI if the governance approves. The SM will act as a recapitalization mechanism, so in the case of a shortfall event, your stake may be slashed up to 30% to cover the deficit. The idea behind “safety mining” is to reward community members who stake their AAVE to promote the safety of the protocol.
At a later date, staking plain AAVE, along with an AAVE/ETH pair leveraging Balancer to earn BAL and trading fees, will be built with incentives decided by the governance.
The rewards will be distributed when you withdraw your AAVE or transfer it from the SM.
All the LEND and aLEND in your wallet can be used for voting.
If the proposal is approved, the migration will be automatically activated. Anyone will be able to migrate from LEND to AAVE, and this will be a gradual process unless the governance votes on a deadline. The staking will also be activated, but stake slashing will not yet be initiated as an incentive to bootstrap liquidity. Post-migration, all AAVE and staked AAVE (stkAAVE) in your wallet will be able to be used for voting.
You can read the full AIP for the token migration here.
The decision-making power rests with the community now, so whether these proposals go through is up to the vote! We invite you to actively participate in the governance of the Aave Protocol and encourage all LEND holders to vote on the first AIP.
Step #1: Head to your “menu” in the Aave DApp
Step #2: Select the proposal
Step #3: Vote “yae” or “nay”
Step #4: If you want to change or cancel your vote…
Voila! You’ve successfully voted!
The voting period for AIP1 starts now and will last for 5 days, with 1 day of validation to prevent double voting. For more details on this process, see the ‘From Idea to Implementation to Execution’ post on the Governance forum.
After the voting period has closed, we will share the results! Feel free to participate in our governance forum where AIPs are proposed and discussed. Check out the Governance FAQ for further information on voting and governance. You can find the audits and contracts for the AAVE Token and Safety Module as well.
As always, follow the discussion on Twitter or jump into our Discord.