• Aave has compensated its recognized delegates for all monies spent on gas fees.
• The decision was influenced by the continuous rise in Ethereum gas fees and the cost of on-chain governance for these delegates.
• Money to cover these costs most likely came from the Aave protocol’s revenue or treasury, as it generates revenue through various mechanisms such as interest fees on loans, flash loan fees, and other protocol fees.

Aave Compensates Delegates for Gas Fees

Lending protocol Aave has compensated its recognized delegates for all monies spent on gas fees. The decision was influenced by the continuous rise in Ethereum gas fees.

Reimbursement Details

According to Aave, “rebating delegates for their participation” offers a number of benefits such as encouraging better decision-making and fostering a diverse voter base by reducing barriers to entry. The money to cover these costs most likely came from the Aave protocol’s revenue or treasury.

Aave Protocol Revenue

Aave generates revenue through various mechanisms, such as interest fees on loans, flash loan fees, and other protocol fees. Last year the protocol generated a cumulative fee of $12 million; however according to data from Token Terminal this represented a 76% decline in network fees.

Benefits of Reimbursing Delegates

By reimbursing gas fees, Aave can retain top delegates which can ensure the growth of its ecosystem and compete effectively with peers like MakerDAO.

Conclusion

The reimbursement of recognized delegates is an important step towards more inclusive governance processes that allow for greater participation in platform decisions while also ensuring that those who are actively involved are properly compensated.