The DeFi Aave Protocol has published a plan for the transition to decentralized management. The first step will be to exchange 1.3 billion LEND tokens for 16 million AAVE tokens to manage the Protocol.
Aavenomics follows in the footsteps of other DeFi protocols moving to decentralized management. Recall that at the beginning of the year, the Compound project announced plans to issue a COMP token to manage the development of the project and the lending Protocol. The launch of COMP on June 15 triggered an active growth of the DeFi industry, the volume of blocked assets in which recently exceeded $4 billion.
According to DeFi Pulse, ETH equivalent to more than $400 million is currently blocked in the Aave Protocol. The first step in the Aavenomics plan is to convert the existing 1.3 billion LEND tokens into 13 million AAVE tokens, with an additional 3 million tokens intended for the”ecosystem reserve”. This reserve will be used for future incentive payments determined by the community.
The transition will be made by voting using LEND tokens in the Genesis Governance Poll to deploy smart contracts required for decentralized governance. Aave owners will be able to use tokens to participate in a Stakeout in the Safety Module, which acts as insurance against unforeseen events.
Aave stake holders will receive a percentage of commissions, as well as payments for maintaining the project’s security. The Balancer pool will boost market liquidity by providing additional potential rewards in the form of swap fees and Bal token distributions for AAVE holders. Recall that earlier this month, Aave launched a new service for cryptocurrency lending without collateral.