Aave Protocol, a decentralised finance (DeFi) platform on the Ethereum Ecosystem, has just teased a new fee distribution mechanism to reward its ecosystem users.
The hints were given by the Founder of Aave through their Twitter account with a tweet stating the current financial conditions of Aave and how the fee distribution will be done.
Aave to Start Distributing Fees to Holders
The new fee distribution mechanism was introduced through a new proposal that was agreed by the members of the Decentralised Autonomous Organisation or DAO of the Aave Protocol.
Aave is a fully decentralised DeFi protocol where the holders of its token can vote on proposals that are going to change how the protocol works.
Currently the focus is on a potential fee distribution reward where it is said by the founder that Aave will introduce a new mechanism for its GHO Stablecoin peg that will introduce a fee distribution reward for its GHO stakers.
This means that stakers of GHO will receive rewards as high as a three figure yearly yield where the rewards will come from fees generated by the protocol.
There was also talk about introducing a new protocol fee mechanism where users can choose specific fees according to their needs where the protocol does not generalise all the fees equally but specify to what the transaction is.
This will enhance the overall experience for users, generating more fees in the future with safe peg for the platform’s stablecoins and steady yields for cryptocurrencies on Aave.
Recorded $60 Million in Yearly Profit
Aave is currently one of the biggest DeFi platforms on the Ethereum Ecosystem and overall the crypto market.
The founder of Aave just announced that the fee distribution mechanism will be done because of how great the platform is doing.
Currently, the revenue of Aave has reached an eight figure mark, reaching $60 Million of profit in just one year.
This is due to the transactions that happened on the platform during the bear market, so imagine when the bull market hits, then Aave will probably significantly more profit due to new investors coming in.
Users are using Aave as a hedging platform for their yields where they can borrow money to generate yields on the platform as well as other platforms.
There are also talks of new updates that will be implemented in the platform which is evident by the many proposals that have been agreed on by the DAO.
However, there is currently a lingering problem, which is the maintenance of DAI, one of the biggest stablecoin on the platform.
DAI is currently facing potential volatility due to MakerDAO’s plan to introduce a huge amount of DAI into USDe, a new algorithmic stablecoin on Ethena.Fi.
This might introduce potential pegging problems which might cause systematic risks all over the DeFi space, including towards Aave.
This is why currently Aave is creating a new mechanism to keep its platform stable which will introduce a new positive outlook on the platform.
Going forward, it will be interesting to see how the platform develops, especially heading into the predicted bull market of 2025.
The main question for Aave is will it be able to maintain its dominance in the Ethereum DeFi space or will it be overthrown by a new lending and borrowing platform in the bull market.
All of it will depend on its DAO, because if the members of the DAO are actively engaging to improve Aave, then there will be no problem going forward.
