Hello,
I’m not a big fan of asset valuation discussions in the governance forum outside of Risk and AIP category but as this thread gain traction I’ll slide in with a few things
-
Don’t compare oranges with apples.
AAVE is not a layer 1 native asset, It can’t be compared to ETH, BNB or others assets for reasons already well explained in this thread -
"The Buy-Back and Burn" model is terrible for long term growth
This model was already implemented, it was the tokenomics of LEND the ancestor of AAVE, during the previous cycle downtrend this model did little to none to prevent market dynamic. Also it’s a terrible model for a protocol that wants to achieve self-sustainability as @Emilio said earlier here. putting money into the fire pit is less efficient to grow and build things then reinvesting the money and spending the interest generated by the capital
- VeCRV model
makes sense in the context of an LM program, instead of doing a quarterly AIP for LM budget, Locked-up AAVE gains governance weighted power to influence the distribution of Liquidity Mining and bonding programs. This model is interesting and worth exploring.
But there are challenges with this model as current implementation in Curve doesn’t mitigate “parasitic” layers on top of it that can influence and create cartels controlling LM and bonding programs (Curve, Lobis, [REDACTED], Yearn)
- Aave V3 is embracing the multiverse
This fact can offer opportunities to generate new use cases for the Native Asset of Aave, What if the governance deploys an Avalanche subnet, a rollup, or a parachain using aUSDC as the native asset for gas? Validators would need to stake AAVE to process transactions and earn fees from the network transactions? This cycle seems to give a premium to L1 assets, it doesn’t seem impossible to consider an “AAVE chain” linked to all networks with portals. This chain would make sense to have cheap and fast usage of Aave and if the main DeFi protocols deploy also there and allow use-cases it might gain traction.
What if Bridges and protocols using the portals would be required to own amounts of StkAAVE to have fees reduction and/or credit lines?
Anyway, let’s focus on long-term building and added-value creation instead of daily charts and short-term plans.
All this is a marathon.
“Investment is a game of wealth transfer from the inpatients’ actors to the ones with patience”