Aave had become the newest in a series of DeFi protocols that relinquish the protocol governance control, moving power from the novel developers to the Aave community to sheer the ship.
Today, Aave announced the official handover of the admin keys to governance contracts organized by the Aave token holders, allowing the decentralized governance votes to have direct control over the protocol changes.
Following the handover, months of testing and tweaking had ensured the governance decisions that would smoothly translate to the changes in-chain action. Aave’s governance tokens were initially distributed during the November 2017 token sale that has risen nearly $18M to develop the protocol.
The move displayed more and more DeFi apps are getting severe about decentralized governance; it brings the ethos of decentralized networks to life at the application level.
Decentralized governance is a different extension of that paradigm. Rather than being ruled by a centralized team of developers, DeFi apps that pursued decentralized governance allow the protocol users to vote on future changes and the protocol’s direction.
“Giving up the admin keys to the Aave token holder governance is a historically remarkable event,” Aave founder and CEO Stani Kulechov stated. “Aave is more decentralized than ever.”
He persisted: “The key handover should also incentivize more developers to contribute to the Aave protocol codebases, creating grant mechanisms and driving the protocol towards self-sustainability. The Aave founding team will be one of the core developers of the protocol in the future and will build what the community wants.”
Back in July, Aave publicized its plans for decentralized governance, outlining mechanisms for rewarding contributors and then providing added security against losses when the crypto backing loan value can tumble. During that time, the protocol has around $400M in user deposits recorded, according to DeFi Pulse. From then on, the overall value of the tokens placed into the lending protocol had risen as high as $1.7B on August 30, having more than $950M locked until today.
Aave is not the first DeFi project that went all-in on the decentralized governance, then following in the footsteps of the projects like lending protocol Compound and the decentralized exchange Uniswap early in 2020. It is another example of phased rollouts the wants to preserve space for innovation and user security through extensive testing before eventually releasing governance into the wild
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