How Could Aave Fee Switch Proposal Reshape DeFi Revenue Models?
Leading decentralized finance (DeFi) platform Aave is getting ready to launch a fee switch mechanism to strengthen its business plan. The creator of Aave, Stani Kulechov, made hints about plans to launch a fee switch program on January 4. Through this proposal, the Aave DAO will be able to modify the way fees are gathered and disbursed, improving the platform’s revenue management.
Aave’s strong financial position backs this endeavor. Stablecoins, Ethereum, and other cryptocurrencies totaling about $100 million are held in its treasury. According to TokenLogic, this amount surpasses $328 million when AAVE tokens are taken into account.
Aave Chan founder Marc Zeller first proposed the fee switch concept last year and stressed its inevitable nature earlier this year. Zeller claims that because Aave’s net revenue greatly exceeds its operating costs, the move is not only feasible but also advantageous.
When your protocol treasury looks like this, and DAO net revenue is more than twice the Opex (incentives included), The Fee Switch isn’t an if; it’s a when,
Zeller
Proposed USDT-USDe Connection Sparks Conflict of Interest Concerns in Aave Community
The Aave community is also considering a more controversial proposal to connect Tether’s USDT to Ethena’s USDe, a synthetic stablecoin. This modification would replace the current Chainlink oracle with Aave’s pricing feeds, bringing the price of USDe and USDT into line. Mitigating the dangers of price swings and unsuccessful liquidations is the aim.
Although the proposal has received a lot of support, some community members have claimed that because the advisors who helped draft it have connections to Aave and Ethena, it may lead to conflicts of interest. To maintain objectivity, critics such as ImperiumPaper have recommended that these advisors step aside.
LlamaRisk is on Ethena’s Risk Committee, which comes with monthly compensation. Ethena hired Chaos early on to help design and develop the risk frameworks used by Ethena. Both should recuse themselves from any oversight of USDe parameters,
ImperiumPaper
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