The DAO for major lending platform Aave is weighing a proposal to freeze BUSD reserves after Paxos stops minting the Binance-branded stablecoin.
‘No Immediate Risk’ to Aave From BUSD Halt
The Decentralized Autonomous Organization (DAO) for Aave Protocol is weighing a proposal to freeze BUSD reserves following news that Paxos Global will stop minting the Binance-branded stablecoin on Ethereum.
The proposal from Marc Zeller of Aave Chan Initiative states that the circulating supply of BUSD will eventually go toward zero because in the future Paxos will only allow redemption of BUSD in exchange for burning BUSD.
“As there’s no real prospect of growth and the inability to mint new BUSD might hurt peg arbitrage opportunity and asset peg. It seems that the most reasonable path for Aave is to freeze this reserve and invite users to switch to another stablecoin among the diversity present in Aave,” according to the proposal.
Aave is the largest decentralized lending protocol in crypto, with nearly $7 billion Total Value Locked (TVL), including $5.8 billion on Ethereum, according to DefiLlama.
The proposal states BUSD is not an asset with borrowing power on Aave and does not present an “immediate risk for the protocol.”
The proposal before the Aave DAO is an early reaction to the cessation of BUSD minting and reports that the U.S. Securities and Exchange Commission may sue Paxos. Other protocols, including the Binance centralized exchange, will grapple with what to do about BUSD in the coming days, weeks, and months.
What is Binance:
Binance positions itself as the world’s leading blockchain ecosystem and crypto-asset infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. The Binance platform aims to increase the freedom of money for users and features a comprehensive portfolio of crypto-asset products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization, and infrastructure solutions.
Where to find Binance:
Source : bsc.news
Founded in 2020, BSCNews is the leading media platform covering decentralized finance (DeFi) on the Binance Smart Chain (BSC). We cover a wide range of blockchain news revolving mainly around the DeFi sector of the crypto markets. BSCNews aims to inform, educate and share information with the global investment community through our website, social media, newsletters, podcasts, research, and live ask me anything (AMA). Our content reaches hundreds of thousands of global investors who are active in the BSC DeFi space.
BSC NEWS is a private news network. All posts posted by this user belong 100% to bsc.news All rights are reserved to BSC NEWS for more information about BSC NEWS contact BSC NEWS HERE.