DeFi
Aave Community Considers Proposal to Split Protocol Revenues Among Token Holders
Aave’s recent proposal seeks feedback from executives on implementing a “fee change” in anticipation of increased protocol revenue.
Marc Zeller, the founder of the Aave-Chan Initiative (ACI), published a proposal to Aave governance on July 25 to create a clear roadmap for distributing Aave protocol revenues among token holders, known in decentralized finance (DeFi) as a “fee switch.”
ACI suggests that Aave implement a “Buy and Distribute” program, which uses excess revenue to acquire AAVE on liquid markets and compensate holders of staked AAVE (StkAAVE).
In the Zeller proposal said “There is little to no difference in user experience compared to the current situation, but in terms of protocol sustainability, this is a paradigm shift. This new system also introduces a constant demand for the AAVE “active in secondary markets.”
The price of AAVE jumped 9.4% from $86 to $94 after the proposal was released.
AAVE Price – CoinGecko
The proposal comes as Aave explores new, more cost-effective security modules. The proposal states that improving economic efficiency will allow the protocol to save more money and thus increase the size of the protocol’s revenue. The excess revenue would theoretically allow the protocol to afford the proposed token buybacks.