A DAO is preparing for a significant overhaul by closing more than 50% of the under -performance L2 agencies. It also restructures its administrative framework and implement more than $ 100 million to stimulate GHO.
This can be a crucial moment that Aave returns to the vanguard of on-chain loans of the loans that arouses unprecedented controversy within the Defi community.
ACI proposes to close 50% of the L2S
The “State of the Union” report of the Aave Chan Initiative (ACI) paints a candid image. After a turbulent period in the Defi market and internal challenges, Aave (Aave) now leads in important statistics: TVL, turnover, market share and loan volume. Aave’s annual turnover of $ 130 million exceeds the combined cash reserves of his competitors. Tokenomics improvements and the AAVE -TOKKOOK program have also contributed to the growth of the ecosystem.
Aave global metrics. Source: Aave
However, the ACI report also emphasizes various pain points.
First, with regard to the Layer -2 (L2) strategy. Although Aave’s L2 strategy was once an important engine for success, it is no longer suitable for the goal. More than half of Aave’s authorities on L2S and Alt-L1s are not economically viable. Based on data on an annual basis, more than 86.6% of Aave’s income comes from the mainnet, which indicates that everything else is a beam.
Based on this, ACI proposes to close under -performance networks. The DAO must invest in important networks with significant distinctions.
Secondly, ACI insists on a complete overhaul of the “friendly fork” framework, because most have not been impressive with regard to TVL and income. In some cases, attackers have exploited them to the disadvantage of Aave, seen with Spark.
“The friendly fork model had a good intention, but poor execution in which the DAO was too friendly to these forks, so that the DAO was not much upside down,” the report said.
Thirdly, the instance model is, as soon as smart innovation in early versions, is outdated in newer versions of the Aave V3 Codebase due to the high costs. That is why ACI suggests that no further development or growth efforts are allocated to authorities in the future, except for the most important body.
Reasonable but risky decision
ACI’s reasoning is logical in the current context. Chain loan is a company with a low margin. Freagmented TVL over several chains draws up high labor and incentive costs, while most income is still generated on the Miret. Streamlining activities will improve business performance by concentrating resources on networks with specific benefits. This approach will also effectively reduce operating costs.
However, this “concludes” decision brings political and community risks. L2 -Ecosystems/partners can object, users can leave those chains and TVL can temporarily decrease. This must therefore be carefully considered in the implementation route map.
A particularly remarkable direction in the report is the focus of ACI on placing Gho Stablecoin in the core of his growth strategy. ACI gives priority to the development of GHO by maintaining the Aave recovery program. This program includes weekly purchases from around $ 500,000 to $ 1 million for the next 18 months. ACI implements more than $ 100 million in reserves for partnership programs and activates a GHO credit line collateral by BTC/ETH/AAVE.
The goal is clear: transform GHO into a director of higher profit margins for the DAO. This shift will go from a low-credit model with low margins to a model with a higher margins via a Stablecoin CDP. If this is implemented effectively, this can significantly increase the income of the DAO and support Aave’s valuation.
Aave is well positioned with a solid financial basis and dominance when borrowing on the chain. The immense potential of GHO places it on a historical opportunity to shape the future of decentralized finances. Short-term risks of TVL reduction or community play can still arise.
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