The fee switch will allow governance to control and adjust fee-related policies based on the platform’s needs and objectives.
A proposal may be in the works at the decentralized lending platform Aave AAVE $120.82, deliberating the activation of a ‘fee switch’ to distribute fees to holders. This was shared by Aave Chan Initiative founder Marc Zeller on the X social platform.
Zeller said, “Temp check to activate ‘fee switch’ next week,” after noting that Aave decentralized autonomous organization (DAO)’s current net profits total about $60 million per year, reflecting five years of operational costs.
Aave is a crypto lending platform that runs on multiple blockchain networks. It allows borrowers to take out loans in one cryptocurrency while depositing another as collateral. It is governed by holders of the Aave token, who collectively form AaveDAO.
In a prior post on the X social platform, Zeller hinted at the possibility of implementing fees for Aave stakers. On March 16, he wrote, “A new iteration of the safety module will suggest distributing fees to stakers.”
A “fee switch” typically refers to a feature or mechanism within a system or platform that allows for the activation or deactivation of specific fees or charges. In decentralized finance (DeFi) protocols like Aave, a fee switch might enable the distribution of fees collected from transactions or other activities to tokenholders or participants in the protocol.
