Thread by @AaveAave

The Aave Protocol V2 launched just last week, and already the market size has surpassed $35M 👻With such rapid growth, it's time to discuss the next phase of the decentralisation process: V2 governance.

Explainer thread 👇

We are excited to introduce the ability to separately delegate your proposal power and voting power. This is a major step in governance scalability as we believe the ability to assess proposals require different skills than those needed to make a smart contract proposal.

This means that $AAVE holders will have the choice between delegating AIP creation power to another entity while still holding their voting rights, or even delegating them to another actor!

For example, since AIPs require some technical knowledge, a non-technical $AAVE holder could delegate their proposition power to someone technical while still keeping their own voting rights.

The AAVE token has different forms that can be used to vote. $AAVE and $stkAAVE holders will have voting rights in the Initial V2 governance implementation, but this can be upgraded through a proposal to include other forms ($aAAVE, AMM shares, etc.)

V2 governance introduces multiple executor entities for parts of the ecosystem that may have different needs for consensus and security.

There will be 2 executors: 1 with a short timelock and 1 with a long timelock⏲️

For example, changing the logic of the $AAVE token itself is something that would have a huge impact on the ecosystem. Thus, it requires higher consensus levels than it would for something like adjusting a risk parameter.

✨Executor 1 (short timelock) will control Aave Protocol v1 and v2 risk parameters, token distributor for v1, contract collecting v1 fees, AAVE Reserve Ecosystem, and changes to this timelock itself

✨Executor 2 (long timelock) will control the upgradeability of the $AAVE and $stkAAVE tokens, changes in v2 governance parameters, and any changes to this timelock itself

Finally, the Guardian will be introduced for an extra layer of security. As long as a majority of governance tokens are on centralised exchanges, it’s impossible to prevent a STEEM-like governance attack where a centralised entity uses its users’ $AAVE tokens to take over.

The Guardian is a temporary 5/10 multisig with veto power in case malicious code is introduced through an AIP. Guardians have been chosen within the Aave community, and they can be changed later through an election process.

This V2 governance opens up the power to create proposals for token additions, risk parameter updates, new liquidity markets, and more power to the community!

For a full overview:

👻You can read the full proposal on the governance forum and leave feedback here:
governance.aave.com/t/arc-activati…