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Will Aave’s Long-Term Growth Plans Dampen Short-Term Investor Expectations?

Aave announced the start of snapshot voting for a recent proposal seeking the renewal of Aave Grants DAO. If approved, the decentralised network may begin stimulating additional development in the pursuit of long-term growth. If the proposal is approved, Aave will be able to concentrate more intently on the network’s long-term future. Because this is a vote on grant renewal, it might be a good idea to look into how previous grants were handled and whether they benefited the network.

According to Aave Grants, more than 122 grants have been awarded since the last proposal. The recipients of those grants concentrated on the development of applications and integrations, as well as community education and marketing. Some of those grants have been used to fund hackathons, so they have benefited the network.

Because there will be no direct correlation with demand, a short-term price impact is unlikely. Nonetheless, it may have an impact, especially given its emphasis on facilitating development.

Aave had healthy development activity in the previous 12 months, but the same metric showed a significant drop in the last four weeks.

Healthy growth may encourage more investors to consider the network’s state. This may contribute to increased investor confidence, but it is only one factor.

Other areas of growth that may contribute to long-term growth should also be considered by investors. Network expansion, for example, has taken a significant hit from November to the present.

AAVE’s declining network growth could be attributed to lower Web3 activity as a result of the bear market. When demand for cryptocurrency recovers, there will most likely be a resurgence or pivot in network activity.

The preceding observation is supported by the fact that transaction volume and daily active addresses have both decreased in recent weeks.

Regardless of the market outcome in 2023, Aave’s decision to direct grants toward network development may benefit investors in the long run. When the market eventually recovers, it will strengthen AAVE’s position.

According to the official announcement, the proposal being voted on is the fourth of its kind aimed at boosting development. The move came at a time when the cryptocurrency market was experiencing a slowdown.

Because the crypto winter has significantly eroded trust and utility in the segment, snapshot voting is critical for AAVE.

 

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