AAVE is preparing to implement a fee conversion mechanism to boost its economic model. This initiative aligns with broader efforts for long-term sustainability and value creation. The fee conversion proposal was hinted at by founder Stani Kulechov on January 4, enabling AAVE DAO to adjust fee collection and distribution methods.

AAVE holds a robust financial position with nearly 100 million USD in non-native assets, including stablecoins and cryptocurrencies, and over 328 million USD including AAVE tokens. Marc Zeller, founder of AAVE Chan, emphasized the necessity of this move, noting that AAVE’s net revenue greatly surpasses operational costs, making the initiative strategic.

The AAVE community is also reviewing a proposal to link Ethena’s USDe stablecoin to Tether’s USDT using AAVE’s price feed, replacing the current Chainlink oracle. Critics argue this might cause conflicts of interest due to advisors connected to both AAVE and Ethena. Some suggest advisors should withdraw to maintain fairness.