Aave offers rewards to its ‘recognised delegates’ in the hopes of… – Crypto News – Crypto News
Connect with us
Aave offers rewards to its 'recognised delegates' in the hopes of... Aave offers rewards to its 'recognised delegates' in the hopes of...

Cryptocurrency

Aave offers rewards to its ‘recognised delegates’ in the hopes of… – Crypto News

Published

3 years ago

on


  • Aave reimbursed recognized delegates for all gas fees spent on voting on-chain & deploying AIPs.
  • While AAVE’s price rallied in the last month, a correction might be on the horizon.

For the first time since the launch of the lending protocol, the governing body of Avee [AAVE] has compensated its independent delegates for all gas fees that they have spent to vote on-chain & deploy Aave Improvement Proposals (AIPs) on the DeFi platform.

Is your portfolio green? Check out the AAVE Profit Calculator

These payments were made out to recognized delegates on July 9 after community members approved a gas rebate. proposal, According to the proposal, the decision to refund recognized delegates for all gas fees spent was made necessary by the continuous rise in Ethereum gas fees, which has, in turn, led to a spike in the cost of on-chain governance for these delegates.

The details

According to Aave, “rebating delegates for their participation” offers a number of benefits. Some of the benefits include encouraging better decision-making and fostering a diverse voter base, such as student organizations, by reducing barriers to entry. Also, by reimbursing gas fees, Aave can retain top delegates. This can ensure the growth of its ecosystem and to compete effectively with peers like MakerDAO.

While the proposal did not mention where the rebate fees were obtained, the money to cover these costs most likely came from the Aave protocol’s revenue or treasury.

Aave generates revenue through various mechanisms, such as interest fees on loans, flash loan fees, and other protocol fees. Therefore, a decline in network fees will often cascade into a drop in protocol revenue. Last year the protocol generated a cumulative fee of $12 million. However, according to data from Token Terminalthis represented a 76% decline in network fees.

As a result, Aave’s cumulative revenue suffered a decline during the same period. According to the same data provider, revenue on Aave logged a 71% decline during the same period.

Source: Token Terminal

Realistic or not, here’s AAVE’s market cap in BTC terms

The state of Aave’s TVL and its governance token

The protocol’s TVL has climbed by 59% since the year began. According to data from DefiLlamaAave’s TVL was $5.857 billion, with its V2 deployment holding a 66% share.

Source: DefiLlama

The protocol’s governance token AAVE saw a value uptick in the last month. Exchanging hands at $71.06 at press time, the alt’s value grew by 38% in the last 30 days, per data from CoinMarketCap,

While the token appeared poised to continue on its uptrend, an on-chain assessment revealed a slight growth in profit-taking activity. This suggests that holders had begun selling their Aave tokens. On a daily chart, although Aave’s Relative Strength Index (RSI) and Money Flow Index (MFI) were positioned above their respective center lines, they were trending downwards.

Likewise, AAVE’s Chaikin Money Flow (CMF) rested at -0.01 at press time, signaling liquidity exit from the market. If this continues, a price correction might follow.

Source: AAVE/USDT on TradingView

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending