Aave: $16M of DAO Funds to be Used to Pay Developers

Aave is depending on votes and proposals of the DAO community to acquire 16 million for development of the platform.
V3 upgrade was launched in March. It introduced cross-chain “portals,” isolated markets, a “high efficiency”

Aave is seeking over $16 million from the Aave community to pay for development work on the platform. The company is depending on the votes and proposals of the Decentralized Autonomous Organisation (DAO) community to determine their path.

The fate of Aave lies in the hands of token holders that vote on issues, new developments, and growth plans like the V3 upgrade. The proposal has reached the legal minimum with close to 100% votes supporting the funding.

Aave stands top on most recommendation lists when it comes to acquiring highly effective and intuitive loans. Aave lets users lend or borrow cryptocurrency without going to a centralized intermediary. DAO is a decentralized autonomous organization, a type of bottom-up entity structure with no central authority. Members that own tokens of the DAO can vote on initiatives for the entity. Smart contracts are implemented for the DAO.

The funding will consist of $5.4 million spread over stable coins DAI, USDT, and USDC, $1.1 million in other unspecified stablecoins. Another $3.3 million in “more volatile crypto assets” and $6.2 million in Aave’s native Aave tokens. The proposal noted that contributors to the Aave protocol included development firms BGD Labs, Certora, Sigma Prime, Llama, Gauntlet, and Aave Companies.

Some 60% of the compensation would go to engineering-based roles, and 40% to non-engineering roles, such as design and product management.

Aave Companies wrote in a proposal to the Aave’s governance forum:

We propose that the Aave DAO retribute a total of $16.28M in retroactive funding to Aave Companies for the development of Aave Protocol V3

In Aave V2, Aave governance activates liquidity mining rewards through community proposals, and rewards are ultimately settled in Aave tokens despite the different rates for each asset. Aave V3 now offers users multiple reward options to leverage their protocol tokens to provide additional incentive rewards.

The V3 upgrade was launched in March. It introduced cross-chain “portals,” isolated markets, a “high efficiency” mode, and other features for a better user experience to compete with rival decentralized finance (Defi) products in the crypto market, as reported. Aave V3 now supports six major blockchains, including Polygon, Avalanche, Fantom, Harmony, Arbitrum, and Optimism.

New Features in the Aave V3 upgrade

1. Portal

The portal allows cross-chain seamless transfer of liquidity of Aave3 to other networks. It also allows cross-chain bridges to mint and burn tokens.

2. eMode (High mode efficiency)

The feature is designed to maximize capital efficiency when collateral and borrowed assets are correlated in price. It opens doors for further applications like High-Frequency Forex, Trading Highly efficient yield farming, and Diversified Risk Management.

3. Risk Management

The upgrade allows the system to identify, assess and control threats. V3 will prevent delinquent loan payments on the Aave protocol. The governance of the Aave protocol will modify risk parameters through voting.

4. Isolation Mode

The isolation mode will allow the Aave governance to list assets with a specific debt ceiling that can only be used to borrow stablecoins. V3 will increase the borrowing rate in Aave.

5. Decentralization

This feature allows the Aave governance to appoint risk admins that will identify and list new tokens. The risk admins will monitor and control the impact of any unfortunate events that may occur during the upgrade.