《AAVE is about to launch a repurchase and dividend plan: DeFi economic model ushers in a new revolution》
After $MKR is about to launch a staking dividend, another old project $AAVE is also going to launch a proposal for a new economic model. The initiator is ACI, who is the main person in charge of AAVE community governance. Basically, all proposals initiated by him will be passed.
Several key points of the new proposal:
✅The original [safety mechanism] will be changed to a new safety system Umbrella. If there is a bad debt in the system, the staked AAVE will no longer share this part of the risk, but will be covered by the AAVE protocol income (the current annual income of the protocol is 60 million US dollars, which is fully affordable)
✅AAVE can still be staked, and there is no need to bear the risk of bad debts. You can also get two parts of income:
(1) Stake AAVE, but unlike in the past, the team will repurchase the profits from the secondary market.
(2) You can get [Anti-GHO], which can be used to offset stablecoin debts, or you can stake it to earn GHO interest.
✅GHO staking will no longer receive additional token rewards from AAVE, and can only receive interest generated by GHO.
✅The initial token LEND of the protocol will stop being exchanged for AAVE, and the tokens that are not exchanged on time will be transferred to the treasury
Summary:
This new proposal is a substantial benefit to $AAVE tokens. There will be no additional issuance of AAVE token rewards generated by staking, and the profits will be used to repurchase AAVE in the secondary market. This will reduce the supply of AAVE and increase demand.
At present, with a relatively cold market, the annual income is 60 million US dollars. In the future, this part of the profit will be converted into buying orders for AAVE in the secondary market. When the market becomes active, income increases, buying orders increase, and the growth flywheel starts to turn.
Staking AAVE will no longer bear risks, which is more friendly to large funds, and will also increase the pledge rate of AAVE and further reduce circulation.
More importantly, we have seen a new paradigm in the DeFi token economic model, starting with $MKR, gradually shifting from token subsidies to real income mining, which will also bring greater attention to such real income projects in the secondary market, and pay more attention to the real revenue of the project.
