What is this about?

The discussion revolves around Aave's governance and the introduction of Aavenomics. Aave Improvement Proposals (AIPs), risk factors, and general governance discussions are the main topics. The governance process involves decision-making for risk parameter changes, improvements, and incentives that form the policies. AAVE token holders have the power to vote on proposals and act as governors of the protocol. Aavenomics introduces several changes, including the migration of LEND to AAVE at a rate of 100 LEND per 1 AAVE, the launch of a Safety Module (SM), and the introduction of safety and ecosystem incentives to reward protocol growth¹.

How is the community reacting?

The community has shown a mixed reaction to the introduction of Aavenomics. Many users expressed their excitement and support for Aave and its governance ^{2,3,4,5,9,10,11,12,14,15,16,19,20,21}. However, some users expressed concerns about the creation of an extra 3 million tokens, viewing it as a dilution of the value of the tokens ^24,31. Others showed interest in the details of the LEND to AAVE swap⁶ and how governance is set up to prevent big stakers from driving their personal agenda¹⁸. Alex_BertoG provided information on where to make the exchange of Lend in the Aave App³⁴.

Why this is positive?

The introduction of Aavenomics is seen as a positive move by many in the community. Kenneth praised the incentive for safety governance and the reward system for Aave holders, believing that the protocol safety is crucial for the long-term growth and sustainability of Aave²². Defidude argued that the 3 million tokens, if used to grow the protocol, would be more beneficial than not minting them at all²⁶.

Why this is negative?

On the other hand, some users, such as Chris1 and Shawman123, expressed dissatisfaction with the creation of an extra 3 million tokens, which they see as a dilution of the value of the tokens ^24,31. They suggested that Aave should use fees to buy tokens to use as rewards instead.