Aave contemplates fee distribution in DeFi shake-up

Share This Post

A proposal may be in the works at the decentralized lending platform Aave (AAVE), deliberating the activation of a ‘fee switch’ to distribute fees to holders. This was shared by Aave Chan Initiative founder Marc Zeller on the X social platform.Zeller said, “Temp check to activate ‘fee switch’ next week,” after noting that Aave decentralized autonomous organization (DAO)’s current net profits total about $60 million per year, reflecting five years of operational costs. Aave is a crypto lending platform that runs on multiple blockchain networks. It allows borrowers to take out loans in one cryptocurrency while depositing another as collateral. It is governed by holders of the Aave token, who collectively form AaveDAO.In a prior post on the X social platform, Zeller hinted at the possibility of implementing fees for Aave stakers. On March 16, he wrote, “A new iteration of the safety module will suggest distributing fees to stakers.”A “fee switch” typically refers to a feature or mechanism within a system or platform that allows for the activation or deactivation of specific fees or charges. In decentralized finance (DeFi) protocols like Aave, a fee switch might enable the distribution of fees collected from transactions or other activities to tokenholders or participants in the protocol. Related: Restaking could introduce ‘hidden risks’ to Ethereum — CoinbaseThe fee switch will allow governance to control and adjust fee-related policies based on the platform’s needs and objectives. Aave DAO recently greenlit alterations to staking fees for its stablecoin GHO to maintain the token’s peg. If Aave DAO proceeds with fee activation, it will emulate Frax Finance, which recently endorsed a proposal to reintroduce its fee switch.However, on April 5, the AaveDAO discussed Dai (DAI) collateral restrictions. Risk management advisers from Chaos Labs presented a fresh proposal advocating a 12% decrease in Dai loan-to-value ratios (LTV), against Marc Zeller’s proposed a 75% reduction.Prior to this, Ave launched a new proposal to set DAI’s loan-to-value ratio (LTV) to 0% across all Ave deployments. Additionally, the proposal recommends removing sDAI incentives from the Merit program starting from Merit Round 2 and onward. The move counters MakerDAO’s rapid D3M plan, raising the DAI credit line to about 600M DAI in a month.Meanwhile, decentralized exchange Uniswap UNI is in the final stages of preparation for its own fee switch proposal, expected to come in mid-April following a successful temperature check. Magazine: ‘Crypto is inevitable’ so we went ‘all in’ — Meet Vance Spencer, permabull

Aave contemplates fee distribution in DeFi shake-up is written by Cointelegraph by Amaka Nwaokocha for cointelegraph.com

Related Posts

The Potential of Hedera: A Deep Dive into the Future of Distributed Ledger Technology

In the rapidly evolving landscape of blockchain and distributed...

Chibi Clash Announces Updates and Upcoming NFT Sale on Xterio Copy

Chibi Clash, a web3 fantasy game universe powered...

Internet Computer (ICP): Revolutionizing the Decentralized Web

As the digital landscape continues to evolve, blockchain technology...

Ethereum ETF confirmed? VanEck spot Ether ETF listed by DTCC

Amid increasing speculation about the possible approval of a...

Citizen Conflict Alpha 5 Launches with Play-to-Earn Campaign

QORPO Game Studio has launched the highly anticipated update,...

Lightspeed Newsletter: New Solana startup accelerator has a DePIN flavor

Howdy!  Welcome to Lightspeed, the newest addition to the Blockworks...
Ethereum (ETH) $ 3,731.01
Bitcoin (BTC) $ 68,806.44
Tether (USDT) $ 1.00
XRP (XRP) $ 0.532725
BUSD (BUSD) $ 1.00
Cardano (ADA) $ 0.458551
Dogecoin (DOGE) $ 0.163436
Litecoin (LTC) $ 85.11
Solana (SOL) $ 167.38