On September 25, DeFi lending protocol Aave announced the release of its Governance Mainnet, where users will be able to trial vote on Aave Improvement Proposals (AIPs) and take part in the development of the platform.
After concluding the signaling poll for the token migration of LEND to AAVE, the company finally launch their first real AIP, which will let clients decide whether to vote for the transition or not. All LEND and aLEND holders can now head over to the dapp and take part in the process.
If the migration is successful, AAVE holders will be able to stake their AAVE in a Safety Module (SM) and earn crypto as a Safety Incentive (SI) in exchange for securing the protocol. The company said that later, a percentage of protocol fees may also be added as a SI if the governance approves. The SM is said to act as a recapitalization mechanism and if there ever is a case of a shortfall event, customer’s stakes could be slashed up to 30% to cover the deficit.
Moreover, Aave stated that, in the future, staking plain AAVE, along with an AAVE/ETH pair leveraging Balancer to earn BAL and trading fees, will be built with incentives decided by governance. The rewards will be distributed when users withdraw AAVE or transfer it from the SM.
In the announcement, the company claimed that all LEND and aLEND in customers’ wallets could be used for voting. After the end of the first AIP, if the proposal is approved, the migration will be automatically activated and a gradual process of LEND to AAVE transition will commence, unless voters set a deadline. The voting period for AIP1 will last for 5 days, with 1 day of validation to prevent double voting.
“Decentralization is the Aave ethos, and the goal was always to give the decisional power to the community,” the company stated. “The decision-making power rests with the community now, so whether these proposals go through is up to the vote!”