The latest update on the Aave governance forum announces the successful passing of the "aCRV OTC" proposal. This proposal suggests a strategic approach to acquire CRV tokens through the use of USDT from the collector contract within the Aave DAO treasury.
The main objective of this governance proposal is to secure 5 million Curve DAO Tokens (CRV). However, there has been a notable divergence of opinions within the community regarding this proposition. Currently, approximately 42.19% of the votes are against the acquisition of CRV tokens through this arrangement. On the flip side, nearly 58% of the community has expressed their support for moving forward with the proposal. The implementation of this plan is anticipated to take place within the next 24 hours.
Aave DAO's initiative is aimed at capturing a significant share of Curve Finance's liquidity. This strategy involves giving priority to pools that offer higher CRV rewards. The allocation of CRV rewards among these pools is determined by the dominance of protocols holding substantial amounts of veCRV tokens. Aave highlighted in the forum that this move is intended to enhance the platform's positioning in the DeFi landscape by effectively utilizing the CRV rewards system.
Michael Egorov, the founder of Curve Finance, has utilized more than 30% of the total market capitalization of CRV as collateral to secure loans worth around $60 million from Aave v2. However, a recent hacking incident on the Curve platform, occurring on July 30, has had a negative impact on the value of the CRV token. This decline in token value has put Egorov's position at risk, as it could lead to the liquidation of his collateral.
Furthermore, Aave has a goal to boost liquidity for its native stablecoin GHO. To achieve this, the platform plans to lock CRV tokens in order to gain voting power within the Curve ecosystem. This strategic move will also involve creating a dedicated gauge for GHO, which aims to enhance the secondary liquidity of the stablecoin.
Presently, the Aave community is deliberating on two proposals aimed at reducing the platform's exposure to CRV. The first proposal suggests lowering the liquidation threshold for CRV on Aave Ethereum V2 by 6%. This proposal is progressing towards approval, having received unanimous support in the voting process. The second proposal focuses on suspending the borrowing of CRV on both Ethereum and Polygon V3. This proposal has encountered no opposition thus far and is scheduled to be implemented after August 13, 2023.
