Aave token holders are expected to take part in an Aave Request for Comment (ARC) that would require them to commit to Ethereum’s proof-of-stake (PoS) algorithm, as mentioned by Cointelegraph.
According to Cointelegraph, the ARC has been developed on the grounds of Ethereum’s upcoming transition to PoS. The initiative has called for members to select the Ethereum’s mainnet functioning under PoS consensus as the new governance system, while also giving power to an authority to shut down any Aave deployments on any Ethereum network. The proposal is expected to be made on Aave’s DAO, which allows Aave token holders to vote on software developments and updates on the AAVE protocol. Going by Aave’s governance website, the proposal will carry the specifications such as members will signal that the Aave DAO initiated on Ethereum mainnet’s PoS consensus is the “canonical governance” of the Aave DAO and Aave markets, and a signal will give Community Guardian the right to shut down any Aave deployments which can arise from the Ethereum merge.
From information given by Cointelegraph, the result of the governance vote should give the signal as to where Aave members will stand with respect to Ethereum’s transition to PoS. Aave also declared that its code was completely functional with regard to Ethereum’s algorithm change, which was done by deploying Aave V3 on the Ropsten and Goerli testnets during the merge tests. Having been initiated on the Ethereum mainnet, Aave is now available on Avalanche, Arbitrum, Optimism, Polygon, Fantom, and Harmony. However, $5.44 billion or 72.6% of Aave’s total value locked (TVL) resides on Ethereum. As a result, any alternative Ethereum form that arises from the merge could impact the Aave market and token price.
Moreover, the price of AAVE token, at the time of writing this publication, stood at $109.95. Aave is estimated to be the third largest decentralised autonomous organisation (DAO), by a market capitalisation of $1.54 billion, after Uniswap (UNI) and ApeCoin (APE).
(With insights from Cointelegraph)