Aave transfers governance to token holders

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Aave's core developers have transferred governance rights over to AAVE token holders, giving its community control over the future of the protocol.

Aave has become the latest decentralized finance project to transfer governance rights to its token holders.

On Oct. 29, Aave announced that the protocol's admin keys had been transferred from its core developers to governance communities under the command of holders of its native LEND utility token.

"Today marks a historic moment for the Aave Protocol: we have officially handed over the protocol admin keys to the governance, an important step towards decentralization!".

The community voted in favor of the first Aave Improvement Proposal, launching migration functionality from the utility token LEND to its new AAVE governance token at a rate of 100:1, and subsequently transferring governance rights to AAVE holders.

AAVE's total supply is 16 million tokens, 13 million of which are redeemable by LEND holders, with the remaining three million tokens allocated to an "Ecosystem reserve." In addition to voting on AIPs, AAVE holders can stake their tokens to earn a share of protocol fees, and can also stake an AAVE/ETH pairing on Balancer to earn BAL tokens alongside trading fees.

AAVE that is held in cold storage or staked can be used to vote on AIPs.

Aave launched in January of this year, emerging as a top DeFi project as the sector began to heat up mid-year.

Aave is currently the fifth-largest DeFi protocol by total value locked, holding more than $980 million.

Aave's TVL has fallen significantly from the peak of August's DeFi bubble, sliding 42% from nearly $1.7 billion.