Aave DAO - Financial Reports & Financial Metrics

this report was super interesting to see what contributions the Polygon market made to AAVE DAO. @Elliott Thank you for this.

On other note - how are you planning to hedge AAVE price action risk ? As in this pic there’s lot of dependence on AAVE price - are you planning to hedge this via options or something?

I would actually like to comment on this aspect.
We should not forget that AAVE is factually governance power, and even if it is unavoidable to look at asset price sometimes as a reference, the analysis of the AAVE treasury of the system in terms of price is not so meaningful, just an extra reference.
All the distributions from that treasury have the objective of giving governance influence to parties chosen by the Aave governance, not profit.
The real Aave system treasury is the one composed of the income on the liquidity protocol.


I want to echo some of this thinking. AAVE treasury should consider some diversification efforts, as its’ treasury is basically all native tokens right now. I don’t know if there have been any formal proposals yet, but I’d be happy to work with the group on here to put together a comprehensive strategy to diversify a responsible amount of AAVE tokens into ETH and stable coins. It’s great that right now there are no real operating expenses offsetting the revenue so that even when revenue is down 54% it doesn’t have a negative impact… but this seems like a ticking time bomb for when more operational flows start going through the DAO’s P&L. I think we should get ahead of the curve, and start building a war chest for AAVE, reduce the VaR of the treasury.

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Hey treasury crew, the Llama team is doing an amazing job with the monthly treasury reports, I myself have a treasury background for many years. Along the lines of diversification that has been mentioned, I’m sure the Llama team would love to have some stable coins / ETH to play with if the DAO treasury was diversified a bit, to earn some yield and also pay for the DAO grants. I saw the new DAO grant proposal for $6mm to be paid fully in AAVE tokens - which seems wild to me. I am planning a proposal discussion to start diversification efforts, would appreciate any feedback from the teams in here as well.

Disclaimer - I’m Alex, a cofounder at Hedgey Finance, CFA and former global treasury manager at WeWork for 6 years (and part of the idea is to use a protocol we’ve deployed to help diversify some of the treasury - though not necessarily the sole tool in this endeavor, just one piece of the toolkit).

This is the outline I’m going for:

Governance Discussion: Aave DAO should diversify a portion of its treasury from governance AAVE tokens into stable coins & ETH


There is significant research around the risks for DAOs who hold a large majority of their treasury in native tokens, especially when it comes to long term planning for DAO funding and operations. I am putting forth this initial forum discussion to propose action to begin diversification of the treasury into stable coins and ETH, with a larger goal of creating a treasury management working group, a subgroup under the DAO, to lead ongoing diversification and treasury management goals on behalf of and for the benefit of the DAO. Initially, I propose converting $50mm worth of AAVE tokens to a mix of stable coins (USDC / DAI) and Ether using the Hedgey OTC protocol. $50mm was chosen as an initial diversification amount given other proposals for funding, where some of this cash could be utilized in grants (like upcoming $6mm grant funding proposal), and sufficient funding to formalize paying contributors in stable coins as the DAO forms more formal working groups, like the treasury management group I’ve also proposed.


  • Builds a stable capital pool that does not fluctuate with the markets
  • AAVE sale (via OTC protocol) is publicly available, and can include token time locks to avoid any impacts to liquid markets
  • Grants and investments can be funded with ETH and stable coins, avoiding the significant sell pressure often associated with funding grants in AAVE tokens


  • Appreciation of the tokens converted will benefit the buyers instead of the Treasury


While there are several methods that DAOs can use to convert tokens responsibly to stable coins, I propose a simple over the counter style token sale offering to the Aave community and public at large. This sale would have the additional parameters of incorporating a discount plus a time-lock for the purchased tokens. At Hedgey, we have built protocols for this purpose, allowing DAOs to publicly sell tokens with a time-lock (with tokens locked in an NFT representing their right to claim those tokens after the vesting period ends). Anyone can participate in the sale, including institutional investors, as well as community and retail investors. Utilizing the Hedgey OTC permissionless protocol is a simple way to execute the transaction and event, which would be incorporated directly into a DAO proposal and executed automatically from the passing of the proposal. Exact details regarding the amount, sale price, and discount are up for discussion, though I would propose the following as a starting point. Draft numbers below (three separate tranches of sales):

Amount of Tokens: 150k
Payment Currency: USDC
Price per token: $130
Effective discount: ~20%
Lock Period / Unlock Date: 2 years

Amount of Tokens: 150k
Payment Currency: DAI
Price per token: $140
Effective discount: ~15%
Lock Period / Unlock Date: 18 Months

Amount of Tokens: 75k
Payment Currency: ETH
Price per token: $120 (priced in ETH)
Effective discount: ~25%
Lock Period / Unlock Date: 3 years


Aave Protocols DAO are a core infrastructure of the web3 ecosystem. As the DAO evolves to expand its involvement with the larger DeFi and web3 ecosystem via grants and additional protocol developments and deployments, the DAO needs to have in place the financial stability to support these important endeavors, with a strong and balanced treasury as its backbone. DAOs, such as Gnosis, that have successfully diversified their treasuries are now able to operate, grow, and invest primarily from their non-native token offerings. By diversifying a portion of the Aave treasury into stable coins, the treasury can then generate stable coin yield on those assets using its own protocols, and fund grants and the DAO indefinitely. Ultimately, this would be the first step in creating an active, healthy, diverse treasury ensuring longevity of the Aave ecosystem.

Hedgey Protocol Information:

The Hedgey OTC protocol is a permissionless OTC smart contract that simply allows a seller to create a sale for their tokens with a given set of parameters; price per token, minimum purchase size, total sale amount, payment currency and unlock date. When purchased the buyers pay directly to the DAO the amount owed, and if the tokens are locked, then the buyers are minted an NFT representing their right to claim those locked tokens after the unlockDate. The NFT contract is the combination of a standard NFT contract with the token-time-locks (with some fun artwork by the Hedgey team to help visualize the tokens purchased that are locked up). As such, the NFTs can be traded and sold on marketplaces such as OpenSea, to get access to secondary liquidity while the tokens are still locked and cannot impact liquid UNI markets.

Links to Hedgey documentation:

About: Hedgey Finance

Audited smart contracts can be found at: Github repo

Documentation: Documentation

Does anyone notice most diagram of the link in Dune is “took too long to execute”

@iceman very interesting proposal, did u get some feedback?

Hey @damonxu, I haven’t gotten any feedback yet! looking for some help and feedback before I post this in the broader forum for discussion and hopefully a quick proposal. I put all this in a shared google doc, would love any feedback on here, or just on this forum discussion before going to the broader group.

@iceman thanks for jumping in here.

I would note the need for a bit more specifics - assuming you mean Aave Grants DAO here?

This reads a bit confusing and misleading.

Second, I would note that Llama does not “play” with the treasury:

Instead, they monitor and report on the balance, helping with workflows and suggesting strategy. All deployments and use of funds must be confirmed via Governance.

I would also remind you that Llama’s relationship is funded via the Grants DAO. This is all to say it feels like the audience for your proposal is a bit misguided.

While there can be better diversification of stablecoins for Aave, this needs a bit more development.

75mm tokens? This is almost 5x the circulating supply - seems this is the Amount in USD?

Great points, sorry meant thousands instead of millions. And yes agreed, Llama does not ‘play’ with tokens, they do an incredible job at reporting and monitoring everything.

Does the AAVE tokens in the DAO not fund the Grants DAO? And would it not make sense to ensure that the Grants DAO has stable coins to utilize for grants rather than deploying AAVE tokens? Are they two separate DAOs operating independently? (hard to find legal organization charts, so I understand I could be completely wrong here in the underlying operating mechanics of the entire ecosystem)

This was just an idea to get some discussion going! Appreciate you jumping in where I’m off basis here, so what do you think would make sense?

Ah, I see - makes a bit more sense now.

At a total of $375k the proposal is less daunting.

I feel it may be better received if you posted this on the forum instead of in the comments to gain more visibility and feedback.

Yea, sry about that. but i agree - will kick off a separate discussion entirely to get some thoughts from people in general first.

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@Elliott thanks for this amazing work! When will the Mar’21 report be released?

Hi all,

We are pleased to present the March Financial report, we apologise for the late running of this report. We have run into limitations with the use of Dune and are working with their team to improve the user experience of the current dashboard. We are also developing in-house our own financial reporting system that is more flexible than dune, allowing us to incorporate all markets Aave operates in. We are hoping to be able to share this with the Aave community by the end of this month in the April update.

In the meantime please do comment and let us know what you would like to see included within these reports going forward.


thanks @Elliott! this is great. do we have CY20 financial data available by any chance?

@Elliott - Thanks for the report. Can you please send the tokenflow statement report as it is not present in the March Financial Report? Also, can you please investigate my query from March 17th, 2022. Would be good to understand burn rate and runway for the protocol considering the recent market drop.

Hi, thanks for your message. We did not present a tokenflow statement this month as we thought it would be misleading without the inclusion of the other markets Aave operates in.

Llama is doing an overhaul of the dashboard and backing system that tracks all transactions. We will be able to provide a tokenflow statement and the information you ask from your post in March in the next iteration of the report, which we anticipate being able to share in the next 2 weeks.

Aave - April 2022 Treasury Report

Llama is pleased to present the April Financial report. Llama is currently facing issues and limitations with the use of Dune. We are however actively developing in-house our own financial reporting system that is more flexible than dune, enabling us to incorporate all markets Aave operates in. This will allow us to bring back the tokenflow statements and provide more in depth analysis of revenue generated across a number of markets not currently supported by Dune.

In the meantime please do comment and let us know what you would like to see included in the reports going forward.


May 2022 Financial Report

@Llamaxyz is pleased to present the community with a May Financial Report. After some solid build time, Llama is now able to provide financial reporting across all network. The May report includes the following Aave markets:

  • Ethereum v1
  • Ethereum v2
  • Ethereum AMM
  • Ethereum ARC
  • Ethereum RWA
  • Polygon v2
  • Polygon v3
  • Avalanche v2
  • Avalanche v3
  • Arbitrum v3
  • Fantom v3
  • Harmony v3
  • Optimism v3

We have now completed our transition away from Dune which will enable us to build out ever increasing detail and analysis over time. Please feel free to comment here and share any financial metrics that folks would like to see in the reports.

Authors from @Llamaxyz: @Elliott, @MatthewGraham and @scottincrypto.


June 2022 Financial Report

Fresh on the back of publishing the May report, @Llamaxyz would like to present the June 2022 Financial Report.

The below image shows a breakdown of all assets held by Aave DAO spanning all networks. The Ecosystem Reserve held $102.4M of AAVE and the combined Reserve Factors held $41,360,574.89 by the DAO at the end on June.

Authors from @Llamaxyz: @Elliott, @MatthewGraham and @scottincrypto.


July 2022 Financial Report

Llama is publishing the July Financial report @Llamaxyz has provided deeper analysis into the various reserve factor holdings and has split out in $ terms total holdings in a granular fashion.

The below image shows a potential prediction of future Revenues expected to be generated based upon July actual data.

We have also summarised all assets held by Aave DAO spanning all networks. The Ecosystem Reserve held $172.4M of AAVE and the combined Reserve Factors held $43M by the DAO at the end of July.

Authors from @Llamaxyz: @Elliott, @MatthewGraham and @scottincrypto.