Aave’s current proposal is searching for governance suggestions on implementing a “fee switch” in anticipation of upper protocol income.
Marc Zeller, the founding father of Aave-Chan Initiative (ACI), printed a proposal to Aave governance on July 25 to create a transparent roadmap in direction of distributing Aave’s protocol income amongst token holders, what in decentralized finance (DeFi) is named a “fee switch.”
ACI means that Aave implements a “Buy & Distribute” program, which makes use of the income surplus to amass AAVE from liquid markets and compensate staked AAVE (StkAAVE) holders.
Within the proposal Zeller says “There’s little to no difference in user experience from the current situation, but in terms of protocol sustainability, it’s a paradigm shift. This new system also introduces a constant demand side for the AAVE asset on secondary markets.”
AAVE’s worth jumped 9.4% from $86 to $94 after the proposal was printed.
The proposal comes as Aave explores new security modules which might be extra cost-efficient. The proposal says the improved financial effectivity will save the protocol extra money, and due to this fact improve the scale of the protocol’s income. The surplus income would in concept permit for the protocol to have the ability to afford the proposed token buybacks.
