In a strategic move to outmaneuver its rivals, Aave (AAVE) has launched “Merit,” a new reward program, on Tuesday at 18:00 UTC. This program is aimed at Aave’s most loyal users.

Merit rewards actions beneficial to the Decentralized Autonomous Organization (DAO). This initiative focuses on genuine contributions rather than generic incentives.

Merit went live, distributing 280 Wrapped Ethereum (WETH) to select borrowers. Furthermore, an airdrop for Aave’s stablecoin – GHO borrowers and stakers is on the horizon.

The success of Merit is evident, with around 200,000 Ethereum (ETH) moving from other protocols to Aave. The program, based on a booster model, rewards weekly WETH and GHO airdrops.

Remarkably, Merit operates additively, ensuring users maintain existing rates and parameters within the Aave ecosystem. It integrates boosters and diluters, fine-tuning rewards to align with Aave’s objectives.

Therefore, actions that further Aave’s strategy receive enhanced rewards, while non-supportive behaviors face reductions. Nonetheless, despite the airdrop announcement, there has been no significant impact on the price of AAVE.

Read more: Aave (AAVE) Price Prediction 2024/2025/2030

The reward system’s intricacies remain confidential to prevent manipulation. However, Merit rewards specific activities like depositing liquid staked tokens, borrowing wETH, and holding stGHO. On the flip side, engagement with non-aligned protocols leads to significant reward dilution.

Currently, Morpho Aave Optimizers v2 and v3 are deemed non-aligned, facing up to a -100% dilution. Marc Zeller of Aave DAO criticized Morpho, labeling it a revenue-draining leech on Aave. Conversely, Paul Frambot of Morpho Labs contested this, highlighting Morpho’s liquidity and revenue contributions to the Aave DAO.

“Aave is attempting to prevent the growth of Morpho by introducing Merit, a rewards program,” Frambot said.

This clash highlights the broader trend of airdrops in the crypto sector, used to boost community involvement.

At a recent game developer conference, Saga network unveiled a new game publishing division, hinting at a mainnet launch. After the mainnet launch, certain eligible wallets can claim Saga network airdrop.

Read more: Best Upcoming Airdrops in 2024

Contrastingly, AEVO’s airdrop of 30 million tokens saw a high claim rate but didn’t significantly affect transaction trends. Starknet’s experience was the same, with a noticeable user dip preceding its airdrop. These cases reflect the diverse outcomes of airdrop strategies in the crypto ecosystem.

The post How Aave Plans to Reward Loyalty and Outpace Rivals Through Merit Airdrop appeared first on BeInCrypto.

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