In what marks a historic moment, decentralized finance (DeFi) project Aave has officially handed over the protocol admin keys to the governance, which it calls “an important step towards decentralisation.”
Initially launched on Ethereum, LEND token holders were the ones with the governance. Now, about a month away, LEND holders voted for the first Aave Improvement Proposal (AIP) to migrate to the AAVE token at a rate of 100:1, “effectively jumpstarting the Aavenomics.”
The governance tokens were first distributed in a nearly $18 million token sale in November 2017.
Currently, LEND’s migration is going on with the AAVE token now the new governance token of the protocol.
With a total token supply of 16 million AAVE, 13 million will be redeemed by LEND token holders, and 3 million will be allocated to the Aave Ecosystem Reserve.
Besides voting on AIPs, Aave holders can stake their tokens in the Safety Module and earn Safety Incentives in exchange for securing the protocol.
Aave protocol facilitates the issuance of “flash loans,” which has been described as the “first uncollateralized loan option in DeFi.”
Currently, the project is the 5th biggest DeFi protocol by the Total value locked (TVL) of $975 million, down from $1.7 billion on August 31st, as per DeFi Pulse.