Aave Contemplates Fee Distribution In DeFi Shake-Up
A proposal to activate a “fee switch” to distribute fees to holders of Aave, a decentralized lending platform based on Ethereum, is underway.
Aave DAO, governed by Aave token holders, currently has net profits of around $60 million per year. A fee switch is a mechanism within a system or platform that allows for the activation or deactivation of specific fees or charges.
If Aave DAO proceeds with fee activation, it will emulate Frax Finance, which recently endorsed a proposal to reintroduce its fee switch.
AaveDAO discussed Dai collateral restrictions, with risk management advisers from Chaos Labs proposing a 12% decrease in Dai loan-to-value ratios.
Aave launched a new proposal to set DAI’s loan-to-value ratio to 0% across all Ave deployments and recommends removing sDAI incentives from the Merit program starting from Merit Round 2 and onward.
(With inputs from Shikha Singh)
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