AaveToken (AAVE) טוקנומיקה

Aave’s token economics are centered around the AAVE token, an ERC-20 utility and governance token that serves as the backbone of the protocol's decentralized ecosystem. The protocol transitioned from its original LEND token to AAVE in October 2020 to implement a more robust economic model.

Issuance Mechanism

The AAVE token has a fixed maximum supply of 16,000,000 tokens. The issuance was primarily handled through a migration process from the protocol's predecessor, ETHLend.

• Migration: LEND tokenholders were able to migrate to AAVE at a ratio of 100:1 (100 LEND = 1 AAVE).
• Total Supply Breakdown: Out of the 16 million tokens, 13 million (81.25%) were allocated for the LEND-to-AAVE migration, while the remaining 3 million (18.75%) were minted directly to the Aave Ecosystem Reserve.
• Circulating Supply: As of recent reports, the circulating supply stands at approximately 14,900,000 AAVE.

Allocation Mechanism

The initial distribution of AAVE was designed to prioritize the community and the long-term sustainability of the protocol.

The Aave Ecosystem Reserve is controlled by AAVE tokenholders and stakers via on-chain governance. These funds are used to incentivize liquidity providers, software developers, and integrators through various grant programs.

Usage and Incentive Mechanism

AAVE serves multiple functional roles within the protocol, creating a multi-faceted incentive structure for participants.

• Governance: AAVE is the primary tool for protocol governance. Tokenholders can create and vote on Aave Improvement Proposals (AIPs). These proposals can impact risk parameters, asset listings, and the allocation of treasury funds. Voting power is proportional to the user's balance of AAVE, aAAVE (interest-bearing AAVE), and stkAAVE (staked AAVE).
• Staking (Safety Module): Users can stake AAVE in the Safety Module to act as a backstop for the protocol. In exchange for assuming the risk of a "Shortfall Event" (where staked tokens may be slashed to cover protocol deficits), stakers receive Safety Incentives. As of April 2024, approximately 820.00 AAVE are distributed daily to stakers.
• Collateral: AAVE can be used as collateral to borrow other assets across various supported networks (Ethereum, Polygon, Avalanche, Arbitrum, and Optimism). However, AAVE itself cannot be borrowed on the platform.
• GHO Stablecoin: Aave Governance also controls GHO, an overcollateralized stablecoin. AAVE stakers may receive discounts on GHO borrowing rates, further aligning the token with protocol usage.

Locking Mechanism

The primary locking mechanism in the Aave ecosystem is the Safety Module. When users stake their AAVE, it is effectively locked to provide security for the protocol.

• stkAAVE: Upon staking, users receive stkAAVE, which represents their staked position and continues to grant governance rights.
• Cooldown Period: To ensure protocol stability and prevent immediate withdrawals during market stress, Aave employs a cooldown period. Users must activate this period before they can unstake their tokens.
• Shortfall Events: In the event of protocol insolvency or a deficit, up to a certain percentage of the staked AAVE in the Safety Module can be slashed (sold) to recapitalize the system.

Unlocking Time and Vesting

The unlocking of AAVE tokens is governed by specific time-based and event-based rules.

• Vesting: The original LEND tokens had a two-year vesting schedule with bi-annual unlocks. Since the migration to AAVE, the majority of the supply is liquid, held by the community or the Ecosystem Reserve.
• Staking Unlocks: As of April 2024, the cooldown period for unstaking AAVE from the Safety Module is set to 20 days.
• Claim Window: Once the 20-day cooldown period concludes, users have a two-day window to claim and withdraw their tokens. If the tokens are not claimed within this 48-hour window, the user must restart the 20-day cooldown process to attempt another withdrawal.
• Governance Execution: Passed governance proposals (AIPs) also have "timelocks" before execution. Short Timelock proposals (covering risk parameters) have a one-day execution delay, while Long Timelock proposals (covering core protocol changes) have a seven-day delay.