Aave is already a DeFi behemoth, with $165 million in its DAOās treasury.
Yet, the crypto lending protocolās coffers may swell further, thanks to Donald Trumpās polarising crypto project World Liberty Financial.
The Aave community was sceptical when World Liberty Financial announced it would build on top of the Aave protocol, Marc Zeller, founder of Aave Chan Initiative, a delegate platform on Aave DAO.
That changed after the Trump project proposed yesterday to give Aave DAO, the crypto collective that runs the Aave protocol, 7% of its WLFI token and 20% of the future fees generated by WLF.
At WLFās planned $1.8 billion valuation, the chunk of tokens given to Aave could be worth some $126 million.
āWhat we witnessed is people welcoming their decision,ā Zeller told DL News.
The move may have reassured many Aave DAO members about World Liberty Financialās intentions.
The Trump project sharing revenue with Aave DAO and giving it tokens aligns the two protocols, while signalling that the politicianās foray into DeFi isnāt solely focused on making money for its owners.
Many in the DeFi community are worried that World Liberty could be a way for the Trump family and the protocolās creators to cash in on DeFi.
The Trump-affiliated project detailed the handouts in a ātemp checkā proposal on the Aave DAO governance forum. In exchange, Aave DAO will aid World Liberty Financial in integrating its latest protocol version on Ethereum.
Temp checks, or Temperature check proposals, are preliminary propositions for DAO members to consider. Approved temp check proposals are put to a vote before being implemented.
What Aave stands to gain
Rather than launching its own bespoke protocol, World Liberty is piggybacking off Aave, the biggest DeFi lending protocol with a whopping $12 billion of deposits.
The proposed integration, if approved, will allow users to deposit USDC and USDT stablecoins, alongside Ether and Wrapped Bitcoin on the protocol.
These assets can be used as collateral to borrow other assets on Aave.
The transaction fees Aave receives from the Trump project will add to the protocolās yearly revenues of around $67 million.
Aave DAO will keep 7% of World Libertyās native WLFI token to vote on governance decisions, per the proposal.
Previous code tests revealed that World Liberty Finance will have a 100 billion token supply.
Project insiders are expected to hold 70% of the tokens while the remaining 30 billion will be sold at a planned $1.8 billion valuation.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.