The founder of the decentralised lending platform Aave, Marc Zeller, has revealed plans for a proposal enabling a fee switch that will benefit holders. Zeller shared this update on the microblogging platform X, stating that the Aave DAO has generated approximately $60 million in profits annually over the past five years.
In his announcement, Zeller informed about the upcoming fee switch scheduled for next week. “Temp check to activate ‘fee switch’ next week,” he stated.
Aave operates as a decentralised lending platform where users can take out loans using one digital asset while depositing another as collateral. The platform operates across multiple blockchains and is governed by token holders of the Aave decentralised autonomous organisation (DAO).
In an earlier statement, Zeller discussed the concept of implementing fees for stakers on the platform. On March 16, he mentioned that recent changes to the safety module might involve distributing fees to stakers.
A fee switch is a feature commonly used by platforms to enable the activation or deactivation of specific fees or charges. In this context, the fee switch will allow the lending platform to distribute transaction fees to users or token holders and adjust fees as per the protocol’s requirements.
Recently, members of the AaveDAO approved a proposal to modify the staking fees for its stablecoin GHO, aimed at maintaining its peg. If approved, Aave will be following the footsteps of Frax Finance, another lending platform that recently reintroduced its fee switch. However, discussions within the AaveDAO have also focused on collateral risks associated with Dai (DAI).
