The Aave protocol V1 included the possibility to burn LEND tokens by collecting flashloan premiums and borrowing fees. Up until now, 2.5M LEND have been burned, which will not be converted to AAVE. As a result of the migration, the LEND liquidity has shrunk considerably, which makes it very hard to buy LEND on dexes for the burning.
The LEND burner currently holds around 20K of funds, distributed across all the different Aave V1 reserves (mostly stablecoins). The burner contract is here https://etherscan.io/address/0xe3d9988f676457123c5fd01297605efdd0cba1ae
This AIP proposes to stop the LEND burning. Instead, the idea is to collect the fees accrued by AAVE V1 to bootstrap a protocol fund.
AIP content in short
- Deprecation of the current TokenDistributor contract
Implementation of the following strategy instead of burning:
- Remove the assets conversion to LEND and subsequent burning
- The assets are moved to the AAVE Collector contract, under direct control of the AAVE governance (https://etherscan.io/address/0x464c71f6c2f760dda6093dcb91c24c39e5d6e18c)
- The implementation will keep the current redistribution of the referral fees (20% of the total) to continue with the referral distribution as until now.
- Upgrade of the TokenDistributor contract https://etherscan.io/address/0xe3d9988f676457123c5fd01297605efdd0cba1ae
Modify the distribute() function as follows:
- Remove LEND burning
- Move the assets to 0x464c71f6c2f760dda6093dcb91c24c39e5d6e18c
Distribution to the current referral fees wallet will be kept.
New TokenDistributor Implementation:
Aave Collector contract:
Copyright and related rights waived via CC0.