AAVE INU ECOSYSTEM
Last updated
Last updated
The above diagram describes the goal to create a flexible, secure and sustainable network of markets regulated by both protocol-wide and market-specific policies, that are defined and validated through a governance process that empowers token holders with the right to decide the path forward.
The Aave Protocol aims to enable global permissionless tokenized asset liquidity markets. This mission was initiated with the release the protocol and pursued with the recent launch of alternative markets. The next steps towards decentralization entail governance and the launch of Aavenomics. The following diagram highlights Aave’s execution plan and the current position in the development cycle:
The first step of the Genesis Governance is the initial bootstrapping of the Aave ecosystem, comprising the AAVE token contract, the migration contract from the LEND token to the AAVE token and a governance contract designed to have the AAVE token as the only voting asset.
The objective of the Genesis Governance is to enable this transition by submitting one or multiple proposals in a governance contract designed to have the LEND token as the voting asset. During this transitional period, the bootstrapping proposals will be submitted by the Genesis Team after being approved by the community via the Aave Improvement Proposal procedure defined in the AIP framework.
The following diagram presents the flow for the approval and execution of proposals during the Genesis Governance phase:
The smart contract components of the AAVE INU Genesis governance architecture include:
AAVEINUProtoGovernance: Serving as the backbone of governance, this component stores the state of each proposal, facilitates voting by AAVEINU token holders, and executes approved proposals. This contract holds the necessary ownership to carry out actions crucial for bootstrapping the AAVE INU ecosystem.
VoteWeightProvider: This component defines the voting weights assigned to each voter for proposals. Only AAVEINU tokens are eligible for voting, with each token carrying a weight of 1 (1 token = 1 vote).
Unlike some other governance systems, AAVE INU's governance permits users to cast votes using cold wallets. Users can simply sign a message and relay the vote using a different wallet, enabling holders of significant funds to participate in voting without moving their tokens from cold storage. The sole requirement is to maintain the AAVEINU tokens in the wallet from which the message was signed throughout the proposal duration. While this approach has potential for abuse, as it does not mandate token locking (allowing users to vote multiple times with the same tokens via different wallets), the governance system implements a vote challenging mechanism to mitigate such risks.
The validation period (V) can be triggered under the following conditions:
When the minimum voting duration is met, and a voter surpasses the quorum.
When the minimum duration has not yet elapsed, but the vote exceeds the quorum. In this scenario, the challenging period must be manually initiated.
During validation, a challenge function is executed for each address that does not hold the tokens used for voting. This challenge action nullifies the voting power of the challenged wallet, and if the proposal threshold decreases due to this action, the voting period is reopened. This process repeats for a specified number of iterations outlined in each proposal, allowing urgent proposals to achieve faster execution times. If the iteration limit specified by the proposal is reached, the result is determined without requiring a quorum.
Governance Process: The governance process is driven by discussions in governance forums at governance.aave.com and formalized through on-chain Aave Improvement Proposals (AIPs) using AAVEINU tokens. The following diagram illustrates the flow of the governance process, from the conceptualization and definition of ideas to their actual implementation.
