DeFi lending protocol Aave announced its new governance framework on the Ethereum main net. With it now the community has power over the platform’s economic resources. Aave is one of the leading lending protocols in the DeFi space. It has over $1.5 Billion crypto-assets locked in its smart contracts.
For the first official vote, the Aave team has put forward the proposal of migrating LEND tokens to the AAVE token. To vote, users have to connect their wallets in the Aave dApp and select the proposal.
If approved by the community,
- The smart contracts designed to facilitate the swap will be deployed. During the migration, users will be able to swap their LEND to AAVE at a ratio of 100:1.
- Post-migration, AAVE holders will be able to stake their AAVE in a Safety Module (SM). The SM will act as a recapitalization mechanism, so in the case of a shortfall event, stakes may be slashed up to 30% to cover the deficit. In return, those who stake for securing the protocol are incentivized with AAVE tokens.
The team at a later date also plans to add a percentage of the protocol’s performance fees as an additional incentive.
