What to know:
- Aave DAO approves $25M funding grant and 75,000 AAVE token allocation for Aave Labs to accelerate protocol growth.
- Aave Labs shifts to DAO-funded operating model, with revenue from Aave products flowing to the DAO treasury.
- Some community members raise concerns about funding package size and token allocation, citing governance standards and voting dynamics.
The Aave DAO has voted in favour of granting Aave Labs, the main development team of the Aave protocol, $25 million worth of funding and tokens. The decision, which was supported by almost 75% of the voters, fits into the “Aave Will Win” plan that intends to speed up the development of the protocol.
Funding and Token Allocation
Aave Labs will be given $25 million in stablecoins, divided into monthly payments over a year, and 75,000 AAVE tokens, with the tokens being released linearly over four years. The stablecoins will be used to cover Aave Labs’ expenses, while the tokens are meant to motivate the developers to enhance the protocol.
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Switch to Aave DAO-Funded Arrangement
The go-ahead is a very big change in how funds are allocated, as Aave Labs will adopt an Aave DAO-funded operating model. The income from Aave products, including Aave Pro, will be directed to the DAO treasury instead of going to Aave Labs. The proposal also confirms Aave V4 as the protocol’s definitive and trusted technical platform and specifies an intention to set up a new foundation that will be responsible for the Aave brand.
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Feedback from the Community and Potential Issues
Although the Aave DAO proposal was adopted by a large majority, a few community members have voiced worries about the size of the funding package and the granting of 75,000 AAVE tokens, which are also able to vote. The Aave Chan Initiative, which is the largest member of the governance delegation, had already stated some worries about governance standards and voting dynamics.
A milestone for the protocol will be marked by the Aave DAO’s approval of the funding grant and token allocation. While Aave Labs will be primarily responsible for protocol development and scaling, the community will be looking intently at how funds are spent and what effect this has on the protocol’s potential for further growth.
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