A reward plan for members of Aave with $16.28M via retroactive funding
A reward plan for members of Aave with $16.28 million in retroactive funding for the development of V3 of the Aave Protocol looks set to pass.
The DAO behind the decentralized finance (DeFi) platform Aave has accepted a $16.28 million retroactive funding for their role in the development of Aave Protocol V3.
Voting for the proposal began on Sept. 6, and has already received 667,000 votes in favor of the funding, more than double the 320,000 required. The vote is set to end on Sept. 8.
According to the original proposal, which was first submitted on Aug. 10, the Aave Request for Comment (ARC) sought “retroactive funding” for work in developing the V3 protocol.
The $16.28 million included $15 million for work performed by the developers over the year and $1.28 million for costs paid to third-party auditors. Members of the firm behind the popular DeFi protocol, Aave Companies will be paid.
The fund will be created using a combination of AAVE tokens, Dai (DAI), Tether (USDT), USD Coin (USDC), alternative stable assets (eg Frax stablecoin) and high volatility assets (eg Synthetix) following the passing of the proposal.
While the origins of the retroactive public funding model is unknown, it became popular after a collaborative post on Medium between Vitalik Buterin and Ethereum scaling solution firm Optimism on Jul. 21, 2021.
The post states that the “retroactive public goods funding” model encourages developers to work on projects by allowing them to get paid after the project is completed and can be based on its value.
The fundamental principle behind the concept is that “it’s easier to agree on what was useful than what will be useful.”
Vitalik recommends that it can be difficult in the beginning phase of a project to get it off the ground, with donations and grant money being inadequate to incentivize developers.
According to blockchain data provider Nansen, the Aave DAO has seen a huge drop in the value of its liquid assets throughout the crypto winter, down from over $800 million in April to around $378 million at the time of writing.
Even so, the community has prodigiously voted in favor of the retroactive funding request, with community members suggesting “Aave Companies did tremendous work and should be paid for that.”
Some community members have raised the issue of the lack of transparency in the proposal, with one member stating in the comments: “I support the proposal, but would wish for as much transparency as possible to raise the bar for any other retroactive proposal in the future.”
