The operators of the crypto-lending finance platform Aave have placed control of the network in the hands of the community. On 28 October, the administrators of the project announced the transfer of power. In doing so, Aave follows the example of other projects in the decentralised financial services sector (DeFi).
Aave is a platform for decentralised borrowing and lending (crypto lending), which aims to stand out from the competition, particularly by offering the possibility of carrying out uncovered flash loans. The Mainnet launch took place in January. At that time the project was still highly centralised. Why, the team explains in the current blog post on the handover of the admin keys:
We wanted to put the protocol to the test and make sure that the government would only be released when it was really ready. After all, we take security very seriously and our top priority is the safety of Aave users.
In September, Aave launched its own governance platform on the Ethereum Blockchain. Prior to this, the voting functions were tested in the Ethereum test networks Ropsten and Kovan.
Project becomes more decentralised
At the end of September, the first vote on an Aave Improvement Proposal (AIP) was held at Mainnet. The community voted for the migration of the platform token LEND to AAVE, the new governance token of the protocol. The AAVE Token Holder can thus participate in future votes on protocol changes. The implementation of the change was still carried out by the Aave administration team.
With the transfer of the Admin Keys the Aave Governance is installed at the same time as Lending Pool Manager. This will enable the community to vote in the future on, among other things, which crypto currencies can be used for crypto-lending. In addition, the Aaave administrators will hand over the keys for the Smart Contract LendingPoolProvider and thus “de facto full control of the protocol” to the Governance, as the blog post states. This concludes with the vague prospect that the Aaave governance could publish new updates in the coming weeks for “further decentralisation in the submission of AIPs”.
Aave course in a descent – and in the best of company
However, the price of the new platform currency Aave has not yet benefited from the announcement. At the time of going to press, the government token is trading at 30.8 US dollars. In the last 24 hours, the price has thus slumped by over 9 per cent. However, the utility tokens of the DeFi competition also had to cope with significant losses in a daily comparison. At the time of writing, according to Coingecko, the “Flop 5” of the Altcoins with the biggest price losses consists exclusively of DeFi tokens. But red candles also dominate the market today – the Corona-related sales at the traditional markets have not left Bitcoin and Co. unscathed.