Aave Chan Initiative proposed on the Aave governance discussion board that the DeFi undertaking’s treasury can buy $2 million of curve tokens (CRV) from Curve founder Michael Egorov.
The initiative is a delegate platform based by Marc Zeller, the founding father of blockchain consultancy agency Pandemic, which works with Aave Corporations — the corporate that designed Aave. Zeller beforehand labored as integrations lead at Aave for 3 years and often contributes to the Aave governance system.
“A 2M USDT price of CRV acquisition would ship a powerful sign of DeFi supporting DeFi, whereas permitting the Aave DAO to strategically place itself within the Curve wars, benefiting GHO [Aave’s stablecoin] secondary liquidity,” Zeller mentioned.
The transaction would end result within the acquisition of 5 million CRV, at the moment price $2.8 million. Zeller prompt that these tokens may very well be locked up and changed into veCRV. These tokens are used as voting rights on the Curve platform, serving to to direct the place the platform arms out token rewards. This may very well be used to incentivize Curve customers to supply liquidity for token pairs that contain GHO.
“As they’re meant for use to vote on Curve Wars probably the most environment friendly strategy is to transform them to VeCRV for the following 4 years for max voting effectivity,” Zeller mentioned.
Egorov has been promoting giant swathes of curve tokens in over-the-counter transactions to a number of crypto people, together with Tron founder Justin Solar, crypto dealer DCFGod and Mechanism Capital co-founder Andrew Kang.
That is to assist tackle his giant mortgage positions, the place he has borrowed tens of millions of {dollars} of stablecoins in opposition to a big portion of the CRV provide. If the value of CRV falls too low and the loans are liquidated, it may very well be damaging for the DeFi protocols that he has used for the loans. Chief amongst them is Aave. In consequence it is no shock that some governance members are cautious of Zeller’s proposal.
“Aave ought to take into consideration methods to cut back its publicity to the chance of CRV liquidation, NOT enhance its publicity much more,” mentioned one.
If the proposal finds settlement, it might want to move a vote for it to be applied.
