Aave

Title: Aave Permissionless Acqui-Hire Framework. Author: DAO Merger. Date: 2025-03-17

Summary: In a Darwinian world with (too) many tokens, there should be a way to conduct “acqui-hire” mergers, where the best-performing project (Aave) attracts talent. Hence we need a permissionless acqui-hire framework.

Motivation:

• Incentivize Proven Value : Teams earn AAVE tokens only after demonstrating measurable contributions to Aave’s ecosystem. Meanwhile, they have to give up their hard-earned treasury and their inflated market caps dreams.

• Aave Token Holder Benefit : The acqui-hired team’s treasury is repurposed to purchase AAVE tokens and reward their community with it, aligning incentives with Aave DAO.

• Permissionless Efficiency : Minimize overhead using governance and pre-existing framework while maintaining Aave’s decentralized ethos.

Specification:

No change are required to the code.

1. Criteria for entry

The framework relies on a single vote after eligibility is confirmed.

Eligibility :

• Team must prove control of a token with at least $50K in liquidity in AAVE tokens.
• Team submits wallet addresses and a treasury address holding their funds.
• Team makes a proposal outling the earn out terms and objectives

2. Execution :

Provided vote is positive :

• Converts the treasury (e.g., ETH, stablecoins, or their native token) into AAVE via a DEX (e.g., Uniswap).
• Distributes the resulting AAVE tokens to the team’s existing holders proportionally based on their token holdings (e.g., 1 OLD_TOKEN = X AAVE, determined by a fair market rate at conversion time) via a claim contract.
• Burns or locks the old tokens to phase them out, ensuring a clean transition.

3. Earn-Out Condition Contract :

• Defines the 3-month performance conditions for the team to earn AAVE. (e.g., TVL, Volumes, Features, BD, Research work …)
• Defines the number of AAVE tokens the team would earn, only if the Earn-Out Condition is reached.
• If conditions aren’t met, tokens are re-allocated to the Aave treasury

4. Tokenomics Impact Assessment :

• Earn-Out Pool : Aave DAO allocates a fixed pool for acqui-hires, capped to prevent dilution. Only allocated if value is provided.
• Demand Boost : Converted treasuries add to Aave’s demand.
• Holder Increase: New holders gain exposure to AAVE, a more established token, increasing Aave’s community and staker base.

5. Challenges :

• Holder Backlash : holders might resist the swap. Mitigation: they can always take their AAVE and sell immediately.
• Scalability : Too many teams could strain the earn-out pool. Mitigation: Prioritize teams by treasury size.

6. Strategic Benefits for Aave DAO :

• Talent Acquisition : Attracts skilled teams without upfront cost, only rewarding proven value.
• Liquidity Growth : Converts small treasuries into AAVE, deepening market depth and staking power.
• Ecosystem Expansion : Absorbs niche projects, in some cases even broadening Aave’s feature set (e.g., RWA).
• Community Buy-In : Gives acqui-hired token holders a stake in Aave, fostering loyalty.

Next Steps: If approved, this framework makes Aave DAO a permissionless talent and treasury aggregator. Teams earn AAVE only after hitting clear, Aave-aligned goals within 3 months, while their treasuries are swapped into AAVE for their holders—boosting Aave’s liquidity depth and reach. After 3 months, team can feel part of Aave DAO and make new proposals to bring more value. Or leave to create new things.

Disclaimer: DAO Merger as an investor in many other projects and in AAVE token could benefit if this happens.

Copyright: Copyright and related rights waived under Creative Commons Zero (CC0).