DeFi project Aave has transferred the ownership rights from core developers to its token owners. The community is now holding the control over the protocol’s development. The first Aave Improvement Proposal (AIP) initiated migration functionality from the utility token LEND to its community governance. AAVE holders can gain a share of protocol fees and BAL tokens by staking their tokens as well as staking an AAVE/ETH pairing on Balancer. Defined itself as, “the first uncollateralized loan option in DeFi,” Aave became the top DeFi project amid the hype. However, as DeFi went bust during August, Aave TVL has dropped dramatically, and is down substantially from its summer highs.
Why it matters: DeFi tokens have gone into liquidation, and these kinds of events aren't likely to stop the widespread selling. While it is great to see Aave taking steps to make its goal of a decentralized financial ecosystem a reality, these platforms are still too young to make much of an impact on the real economy, although that may change in the next few years. On a longer timeframe, DeFi will probably be the next frontier in finance, as it allows people to connect directly, and cut a lot of inefficiency from the financial system. Staking is also going to be more popular, as central banks are stuck at 0% interest rates, and are going to be there for a while.