New Aave proposal confirms "fee switch" rumours: Aave is considering using revenue to purchase AAVE and distribute to AAVE stakers. The proposal cites two GHO milestones:
- 175M GHO supply
- Enough secondary liquidity to allow for a 10M swap within 1% slippage
https://governance.aave.com/t/temp-check-aavenomics-update/18379
GHO supply growth is stimulated by a heavily discounted borrow rate for stkAAVE holders alongside additional "Merit" incentives stkGHO.
The current budget for Merit incentives is $20m/year, approx 25% of Aave's yearly revenue, targeted primarily at GHO supply growth.
https://governance.aave.com/t/arfc-merit-a-new-aave-alignment-user-reward-system/16646
Borrow rates (Aave V3)
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AAVE/USD* (uniswap-v3)
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Aave has distributed 380k AAVE (~$37m) in rewards for AAVE stakers in the past year. There is approximately 800k remaining in the Aave ecosystem reserve.
AAVE rewards for stakers
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GHO liquidity
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Interest payments from GHO borrowers are captured by the Aave treasury. Approx. $7m annualised at current rates.
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GHO peg is evolving.
GHO/USDC (uniswap-v3)
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3M AAVE is staked and earning rewards - that's around 19% AAVE's total supply (16M).