Happy Wednesday fellow DeFi degens!
I was expecting to spend a large portion of this edition of Finance Redefined analyzing Aave s liquidity mining program. There was some anxiety from investors that the emission of 2,200 $AAVE per day (which would translate to roughly 5% of the ecosystem reserve fund of 2.8 million AAVE per year) might end up dragging down the token s price as farmers earn and dump.
I would feel very uncomfortable holding an asset if the governance token of a very important protocol ends up in the hands of people who only think about short term gains. Grogu (@eip1559) April 26, 2021
Turns out, it s unnecessary: the program s an unmitigated success. The AAVE token is up nearly 15% since the launch of liquidity mining to $462, and the protocol s total value locked figure has surged to $11.8 billion up from just over $7 billion since liquidity mining began.