DeFi Lending Protocol Aave Passes Off Governance to Community
Popular decentralized lending protocol Aave has grown at a rapid pace amid 2020’s DeFi boom, in large part thanks to excellent execution and stewardship from the Aave team in recent months.
Yet this ramping up has also brought Aave, currently DeFi’s fifth-largest app, to the point where the protocol no longer has to depend on such stewardship from Aave’s builders. This is precisely why these innovators are now notably passing off Aave’s reins to the project’s global community.
Governance Handed Over
In what’s already been a jam-packed year of major developments for Aave, the community governance hand off is arguably its biggest one yet.
Announced on Wednesday, Oct. 28th, the planned transition means that Aave’s protocol admin key will soon be in the hands of Aave Governance, the project’s community system.
This is a pivotal transfer, as the admin key can be used to change certain consequential parameters of the Aave protocol. With it soon to be out of the Aave team’s hands, stakeholders can verify the Aave system is administratively tamper-proof and directly steward the project collectively.
“The Aave Protocol has always been non-custodial, so users maintain full control over their funds, but in the true spirit of decentralisation, we want the community to have full control over the protocol as well,” Aave’s creators said on the news.
What’s Next
The Aave team unveiled Aavenomics, a major upgrade to the protocol’s governance and token systems, back in July. Promptly approved by community governance, this upgrade launched a LEND to AAVE token migration and kicked off Aave Governance as underpinned by AAVE insurance staking.
With this new governance system having already proven itself in the wild for weeks now, Aave’s creators decided the time has come to put the protocol in the community’s hands.
This process will start through the Aave team giving control of the project’s Lending Pool Manager contract, the “entity enabled to change parameters on the protocol contracts,” to Aave governance, followed by LendingPoolAddressProvider, the “factory contract that deploys all the core pieces of the system and can update them,” and the TokenDistributor, which “receives all the protocol fees and manages their distribution.”
After these events, the buck stops with the Aave community as far as where the project goes from here.
“In the coming weeks, the governance may also update more parameters of the governance system in order to further decentralise the proposal submission process,” the Aave team additionally noted on Wednesday.
Why It Matters
Since day one Aave has strived to be a decentralized lending protocol, with the operative word here being decentralized.
That said, decentralization is a spectrum in crypto and oftentimes it’s the case that DeFi projects start out centralized and then decentralize overtime as their protocols mature. But ultimately DeFi’s promise won’t fully bloom unless more and more projects live up to their better angels and fully pass off their admin keys so nothing’s left to chance in the years ahead.
That’s why what Aave’s doing with its governance transition is exemplary and living up to what DeFi’s all about: providing uncensorable, trustless finance in verifiable fashion.
Moreover, it’s exemplary how Aave has gone about this process. All along the way the project has communicated openly on its roadmap and trajectory to decentralization, which in kind has managed and led to realistic community expectations.
For now, Aave’s undoubtedly a top project to watch in DeFi going into 2021 and beyond because it’s doing all the right things and has positioned itself well for future adoption and success. No one knows what’s coming next in the protocol wars, but it is clear that Aave’s currently a big contender.
The post DeFi Lending Protocol Aave Passes Off Governance to Community appeared first on Blockonomi.
OhNoCryptocurrency via https://www.ohnocrypto.com/ @William M. Peaster, @Khareem Sudlow
