According to PANews, the Aave governance advocacy group, ACI, has released a report on the current state of the Aave DAO, highlighting economic challenges across its Layer 2 (L2) and Layer 1 (L1) instances. The report indicates that over half of these instances are economically unviable, with more than 86.6% of Aave's revenue since the beginning of the year coming from the mainnet. Consequently, ACI suggests closing underperforming L2s and plans to propose related measures soon.
ACI also recommends reforming the fork framework to prevent dilution of value from third-party forks like Spark. Additionally, it suggests implementing performance incentives linked to key performance indicators (KPIs). Due to narrowing profit margins in the lending business, ACI emphasizes the development of the stablecoin GHO.
The report advises the DAO to maintain AAVE buybacks ranging from $500,000 to $1 million per week over the next 18 months. It also suggests utilizing over $100 million in reserve funds for growth and distribution partnerships. Furthermore, ACI plans to propose a growth investment principle framework to the DAO, which includes expanding credit lines through GHO, using BTC, ETH, and AAVE as collateral, to enhance financial leverage.
