Not too long ago now the Aave governance went live on the Ethereum mainnet, putting the governance in the hands of the LEND token holders. Shortly after, the vote for the first Aave Improvement Proposal (AIP) took place, and LEND holders voted for the LEND token to migrate to the AAVE token at a rate of 100:1, effectively jumpstarting the Aavenomics. The migration is in effect, and the AAVE token is the new governance token of the protocol.
AAVE holders can vote on AIPs (proposals for updates and changes to the protocol) and they can also stake their AAVE in the protocol Safety Module and earn Safety Incentives in exchange for securing the protocol. Catch up on everything migration and staking related here! The first governance voting went smoothly, and there have been many proposals, discussions, and more in our governance forum — it is clear that the Aave community is full of great ideas and is keen to actively participate in the future of the protocol.
Today we are excited for the next important step in our decentralisation journey: the handover of the protocol admin keys to the governance!
Aave launched back in January 2020, and since then, the Aave team maintained control of the admin keys in case any issues came up. We wanted to battle test the protocol, ensuring that the governance was only released when it was truly ready. After all, we take security very seriously, and our top priority is the safety of Aave users.
Additionally, the protocol had a lot of developments and innovations in this initial phase, and the team wanted to make sure to roll out these new features as quickly as possible without sacrificing security, so users could do more with the protocol. The Aave Protocol has always been non-custodial, so users maintain full control over their funds, but in the true spirit of decentralisation, we want the community to have full control over the protocol as well.
Now that the governance has been released, tried, and tested, it is time to migrate the ownership of the Aave Protocol to the governance smart contracts. To do this, we will:
- Set the Aave Governance contract as Lending Pool Manager. The Lending Pool Manager is the entity enabled to change parameters on the protocol contracts (LTVs, thresholds, enable/disable as borrowing/collateral, etc.) and list new assets
- Give the ownership of the LendingPoolAddressProvider contract to the Aave Governance. The LendingPoolAddressProvider is the factory contract that deploys all the core pieces of the system and can update them, factually having full control over the protocol.
- Give the ownership of the TokenDistributor contract to the Aave Governance. This contract receives all the protocol fees and manages their distribution.
In the coming weeks, we will also update more parameters of the governance system in order to further decentralise the proposal submission process.