Aave has proposed an extensive update for his economic framework, aimed at income distribution, incentives and liquidity management.
The proposalIntroduced by Aave Chan Initiative (ACI) founder Marc Zeller on March 4, is considered a crucial development in the evolution of Aave. He stated:
“We consider it the most important proposal in our history.”
According to the proposal, Aave has consistently expanded the presence of the market for the past two years and has built a strong financial basis.
Despite fluctuating market conditions, Aave continues to generate robust income, with the liquid reserves of the Defi protocol increasing by 115% to reach $ 115 million. This strong financial position enables Aave to continue with his Tokenomics upgrade while he remains competitive.
A crucial aspect of the proposal is the establishment of the Aave Finance Committee (AFC), an entity supported by governance that is responsible for the management of treasury funds and liquidity strategies.
The AFC will supervise financial allocations within the Aave ecosystem and ensures sustainable income distribution.
The initiative includes contributions from important stakeholders, including Chaos Labs, Tokenogic, Llamarisk and ACI.
Return strategy
The AFC will manage an AAVE recovery program of six months to improve the token value and sustainability of the ecosystem, which allocates $ 1 million weekly. In the meantime, the program can expand based on the financial health of Aave, awaiting further approval of the board.
The AFC can carry out purchases directly or collaborate with market makers to acquire Aave from secondary markets. These tokens are then distributed over the ecosystem reserve.
Tokenlogic, a financial service provider for a DAO, will structure back -buying on the basis of the general budget of the protocol. The goal is to ultimately match – and to exceed – all protocol spending related to Aave while retaining a cautious treasury approach.
With new income flows that are expected in 2025, the AFC can propose an increase in the return budget. TokenLogic will determine which assets will finance these purchases, whereby strategies are adjusted monthly on the basis of the Aave’s composition.
Introduction of ‘umbrella’ for risk reduction
Aave is currently making significant liquidity costs, which is $ 27 million annually. To optimize capital efficiency, the proposal suggests that setting up and liquidity management is consolidated under a new system called umbrella.
This mechanism is designed to offer unparalleled protection against uncoustable debts – an area where competitors have largely withdrawn.
By offering this security, Aave strengthens its position, especially for institutional participants who are wary of risks on chains.
In the meantime, Paraplu would be integrated into several blockchain networks, including Ethereum MAINNET (Core & Prime authorities), Avalanche, Sonic, Arbitrum, Gnosis and the basic network supported by Coinbase.
Depreciate
The proposal also tries to complete the transition from Lend, Aave’s original governance, to Aave from 2020 to Aave.
The plan includes the freezing of the lend migration contract to reclaim 320,000 Aave tokens with a value of approximately $ 65 million.
The proposal noted that the community had sufficient time to complete the transition and suggested closing the migration process.
After this, the Defi protocol board can decide how these repaired funds are allocated -whether it concerns growth initiatives, security improvements or token burns.
Anti-gho
Aave also suggests launching anti-Gho, a new reward mechanism designed to improve stimuli for GHO Stablecoin holders. This function would replace the current discount model with a non-transferable ERC20 token.
Anti-Gho would be distributed under Aave and Stkbpt strikers. Holders could burn token against a 1: 1 ratio against GHO debt or convert to stkgho.
The issue of Anti-Gho would be immediately linked to income generated by GHO. A governance-determined percentage of the income from GHO facilitators would be assigned in the direction of mood and distributing anti-Gho.
This approach ensures that stimuli remain sustainable and scaled proportionally with the growth of Aave.
However, the implementation of anti-GHO may require additional development and auditing. The function could be introduced in a future Aavenomics part two proposal.
