Aave developers set to receive $16.3 million via retroactive funding

A proposal to reward members of Aave societies with retroactive funding of $16.28 million for the development of v3 of the protocol Aave seems about to be adopted.

The Decentralized Autonomous Organization (DAO) behind decentralized finance (DeFi) platform Aave has accepted a proposal to reward members of Aave Companies with $16.28 million in retroactive funding for their role in the development of the Aave v3 protocol.

Voting for the proposal began on Tuesday and, at the time of writing, has already garnered 667,000 votes in favor of funding, more than double the required 320,000. Voting is expected to close on September 8.

According to the initial proposal, which was first submitted on August 10, the Aave Request for Comment (ARC) requested "retroactive funding" for the v3 protocol development work.

The $16.28 million consists of $15 million for work done by the developers over more than a year and $1.28 million for fees paid to third-party auditors. The money will be donated to members of the company behind the popular DeFi protocol, Aave Companies.

The funding will consist of a combination of AAVE tokens, Dai (DAI), Tether (USDT), USD Coin (USDC), stablecoin alternative assets such as Frax stablecoin and higher volatility assets such as Synthetix after the passage of the proposal.

While the origins of the retroactive public goods funding model are unclear, it was popularized following a collaborative Medium post between Vitalik Buterin and Ethereum scaling solutions company Optimism July 21, 2021.

The post argued that the "retroactive funding of public goods" model incentivizes developers to work on projects by allowing them to be paid once the project is completed and can be based on the value it provides .

The basic principle of the concept is that "it is easier to agree on what was useful than on what will be...