- DeFi platform Aave is considering allowing its DAO to control its “fee switch” feature
- The platform is contemplating sharing funds collected as transaction fees with its users
- The decision to expand the DAO’s powers is however yet to be made
DeFi protocol Aave may give its DAO the power to decide on matters pertaining to fees charged on the platform including whether to share transaction fees with its users. The changes may be effective if a yet-to-be-tabled proposal receives enough support from the community. Among the proposal’s major agenda is to activate a feature that would see users like stakers receive a portion of the transaction fees, something that’s likely to be embraced by the platform’s governing council Aave DAO.
$60 Million per Year
According to the founder of an Aave DAO service provider Marc Zeller, the fee switch feature may be activated as soon as this week, adding that Aave DAO records profits of up to $60 million each year.
The Aave treasury “Cash” (Eth & Stables) is now at 50m$. (2.5 years of operational costs)
Net DAO profits are currently at $50m/year and growing.
Temp check to activate “fee switch” next week.
You can track the treasury balances with @zapper_fi 👇https://t.co/HNRTcA5jCf
— Marc “Chainsaw” Zeller 👻 🦇🔊 (@lemiscate) April 6, 2024
Apart from allowing for fees to be shared with users, the feature also touches on other fee-related changes. The proposal will give Aave DAO the power to control such changes.
Aave’s competitor Curve Finance commented on Zeller’s X post noting that it’s “glad that Aave is also bringing fees to the people soon!” Aave’s move to consider distributing fees to its users seems like a response to an ongoing push by DeFi platforms to share their revenue with users.
Awesome ser! We also have around 50m/yr going to veCRV now. Glad that Aave is also bringing fees to the people soon!
— Curve Finance (@CurveFinance) April 7, 2024
Uniswap, for example, is in the process of activating a similar feature. According to Uniswap, such a move would “invigorate and strengthen Uniswap’s governance system by incentivizing active, engaged and thoughtful delegation.”
Unwritten Objectives?
Aave’s intended move comes two months after its risk steward Gauntlet left citing “unwritten objectives,” something that the protocol’s community disagreed with.
It also comes roughly five months after the network’s parent company rebranded to Avara to increase its presence in the web3 world.
With Aave and Uniswap contemplating sharing their revenues with users, it’s to be seen whether other top DeFi protocols will follow the same path.
