Aave’s $328 Million Treasury Fuels Hope for Fee Switch
ghostthe leading decentralized finance (Decentralized Finance) platform is preparing to introduce a fee conversion mechanism aimed at promoting its economic model.
This step is consistent with broader efforts to ensure long-term sustainability and create value for the Aave ecosystem.
Aave’s Fee Switching Program
January 4, Stani Kulechov Ive’s The founders hinted at plans to launch a fee switching program. The proposal aims to enhance the platform’s revenue management by enabling Aave DAO Adjust how fees are collected and distributed.
Such mechanisms are Commonly found on DeFi platforms, usually rewarding token holders and stakeholders through Transaction fee redistribute.
Aave’s solid financial position supports this move. Its vaults hold nearly $100 million in non-native assets, including stablecoins, Ethereum and other cryptocurrencies. If the AAVE token is taken into account, this number exceeds $328 million, according to TokenLogic data.
Marc Zeller, founder of Aave Chan, first The idea of fee switching was mooted last year and highlighted its inevitability earlier this year. Zeller said Aave’s net revenue significantly exceeds operating expenses, making the move not only feasible but also strategic.
“When your protocol treasury looks like this, and DAO net revenue is more than double Opex (including incentives), fee conversion is not an if; it’s a what if. It’s a when,” Zeller point out.
Aave is the largest DeFi lending protocol, Provide users with decentralized lending options. According to Dellama data, the platform has more than $37 billion worth of assets locked up.
Aave’s USDe-USDT proposal sparks criticism
Meanwhile, the Aave community is also evaluating a more controversial option proposal Link Ethena’s USDe, a synthetic stablecoingo to Tether’s USDT.
This change will align USDe’s price with USDT using Aave’s pricing feed, replacing the existing chain link Oracle. The goal is to mitigate risks associated with price fluctuations and unprofitable liquidations.
USDe stands out from traditional stablecoins Similar to USDT in that it relies on derivatives and digital assets like Ethereum and Bitcoin rather than fiat reserves. USDe is the third largest Stablecoinbehind USDT and USDC, According to DeFirama data.
While the proposal has received strong support, some community members believe it could create a conflict of interest because the consultants involved in drafting the proposal have ties to Aave and Ethena. Critics such as ImperiumPaper have suggested that these consultants recuse themselves to ensure impartiality.
“LlamaRisk is a compensated member of the Ethena Risk Committee on a monthly basis. Ethena hired Chaos early on to help design and develop the risk framework used by Ethena. Both are expected to recuse themselves from any oversight of USDe parameters,” Imperium Paper point out.
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