Aave DAO votes in favor of acquiring CRV tokens with USDT
The DAO will use $2 million worth of USDT to secure 5 million CRV tokens
WindAwake/Shutterstock modified by Blockworks
Led by Marc Zeller of the Aave Chan Initiative, Aave DAO’s community governance process has approved a proposal to strategically acquire CRV tokens using USDT from Aave DAO’s treasury.
This comes in the wake of a recent exploit, when Curve lost over $70 million due to a bug in the programming language Vyper. The aftermath saw CRV, Curve’s native token, plunge to $0.59 at the time of writing; a significant drop from its previous position of approximately $0.73 pre-exploit.
He believes it also presents an opportunity to bolster secondary liquidity for Aave’s stablecoin, GHO.
“These tokens can be mobilized to incentivize GHO liquidity via locking them to gather Curve voting power and support a GHO-specific Gauge,” Zeller wrote in a proposal. “The treasury balance and the predicted lower costs for service providers for the 2023-2024 budget would allow this strategic acquisition while maintaining a conservative stance with DAO treasury holdings.”
Curve’s founder, Michael Egorov, had taken out a significant loan of an estimated $70 million in USDT using CRV as collateral on Aave v2. This meant that if the price of CRV dropped below 65% to roughly $0.32, Aave could potentially be left with bad debt. Egorov ultimately undertook a process to rebalance and pay down some of that debt.
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