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Aave(AAVE) token holders were asked to participate in an Aave Request for Comment (ARC). It requires them to “commit” to Ethereum’s proof-of-stake (PoS) consensus.
Introduced on Tuesday, the ARC has released Ethereum’s highly awaited upgrade ‘The Merge’ is about to happen. Under the new “canonical” governance system, members will be asked to make selection of the Ethereum mainnet running under PoS consensus. At the same time, authorities will also have the power to stop any Aave deployments on any alternative Ethereum forks.
How Will Ethereum Upgrade Affect Aave?
Aave’s decentralized autonomous organization (DAO) will have the proposal. As a result, AAVE token holders will be able to vote on software developments and updates to the Aave protocol. The proposal includes two main specs, as per the governance website of Aave. Members will indicate formally that the “canonical governance [mechanism]” of the Aave DAO and Aave markets is Aave DAO on Ethereum mainnet’s PoS consensus.
A signal will grant the community guardian power to close any Aave deployments on any other forks that emerge from the Ethereum Merge. The results of the governance voting will be a good indication of the Aave members’ stand with respect to Ethereum’s transition to proof-of-stake.
Aave also mentioned in the report that with respect to Ethereum’s consensus change, its code was “fully functional.” The changes were done by deploying Aave v3 on the Goerli and the Ropsten testnet during the Merge tests. As per the latest tentative schedule by Tim Beiko, core developer of Ethereum, the Ethereum merge can take place on September 15.
Aave is currently listed on Fantom, Harmony, Polygon, Avalanche, Arbitum and Optimism. Though it was first deployed on the Ethereum mainnet. Currently, the TVL of Aave on Ethereum makes for about 72.6% or $5.44 billion. Therefore, it wouldn’t be a surprise if any changes in Ethereum affect the Aave market and token price. At the time of writing, AAVE was trading at $106.80. After Uniswap and ApeCoin, Aave is the third largest DAO in terms of market cap, which is $1.54 billion.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
