Lending and borrowing DeFi platform Aave announced that it began the admin key handover process, ensuring complete decentralization.
This is yet another step in establishing Aave’s governance system, this time by ensuring that the developers cannot manipulate funds. The announcement was shared in an official blog post on October 29.
As Defiye reported last month, the Aave protocol finally started migrating from centralization to decentralization by launching the governance mainnet.
Experimenting with various testnets such as Kovan and Ropsten for some time, the system became ready for full release. After that, the first Aave Improvement Proposal (AIP) took place, and LEND holders successfully voted to migrate to the AAVE token.
This series of events continued by initiating the migration process and announcing AAVE staking. After the migration completes, holders can secure the entire blockchain network with the help of the new Safety Module.
Since the original AIP, there was plenty of discussions on the native governance forum, indicating that the community has taken the idea of complete decentralization seriously.
Now, the Aave team decided to chip in as well by handing over the admin keys. Since the original launch in January this year, the team maintained full control of the keys. This was done to save users’ funds and protect the platform if any serious problems appeared.
In the new blog post, the team notes that it will launch the governance system only after the protocol became fully ready. Aave believes that security is a very serious concern and that it should be their top priority, to ensure the safety of Aave users.
How Aave planned the Admin Key Handover
Aave noted that it was always a non-custodial protocol and that users had full control over their funds at any time. Now, it is finally the time to turn the protocol 100% decentralized by giving the community full control over the Aave protocol.
To do so, the team will migrate the ownership of the protocol to the already established governance smart contracts. Essentially, the team plans to set the Aave governance contract as the Lending Pool Manager.
This is the entity that has the privilege to change parameters on almost all protocol contracts, such as LTVs, thresholds, enabling and disabling borrowing or collateral, etc. The Lending Pool Manager can enlist new assets on Aave or delist old ones.
After that, the ownership of the LendingPoolAddressProvider contract is set to be given to the Aave Governance system. This contract represents the factory contract that deploys all the fundamental features of Aave and updates them. Practically, this smart contract owns full control over Aave.
Finally, the team will grant ownership of the TokenDistributor contract to the governance system. This is the smart contract that receives all fees and distributes them to users.
Finishing these three steps would mark the end of partial decentralization. Moreover, it would turn the Aave community into the sole managers of the protocol. But the story does not end yet. In the announcement, the team noted that it will upgrade more parameters of the governance system to further decentralize proposals.