PayPal’s PYUSD to Be Integrated into Aave Following Vote
Coinspeaker
PayPal’s PYUSD to Be Integrated into Aave Following Vote
Within the crypto world, many major projects function as Decentralized Autonomous Organizations (DAOs) and this means that community members can vote on decisions to be made. Thus far, this has proven to be popular and drives engagement. One of the latest examples of this is with Aave, a decentralized non-custodial lending and borrowing protocol. Users of the protocol recently held a vote to onboard PayPal’s PYUSD stablecoin to its Ethereum-based pool.
PYUSD Coming to Aave
The vote in question was held as a ‘temperature check’ and noted the benefits of the token. These included creating synergies between Aave and PYUSD, giving Aave users an additional stablecoin option, and improving the relationship between the PYUSD & the GHO stablecoin.
The proposal was that PYUSD should be onboarded to Aave but without collateral properties and outside isolation mode.
“If the community deems that PYUSD as collateral is immediately viable we stand ready to support that role on day one,” it says, adding that if the community thinks otherwise, Aave governance can propose a collateral activation for PYUSD later on after it matures.
This proposal initially went live back in December 2023 and was pushed by Trident Digital. Thus far, the proposal has proven popular with the community, with 99.98% of token holders voting in favor of it. The proposal will remain up until January 11, 2024, but the results are clear at this point.
And this isn’t the only work that Trident is doing with regard to PYUSD. On Curve, an automated market maker, the firm incentivizes the PYUSD/USDC liquidity pool. Once PYUSD is included in the Aave liquidity pool, Trident will put forward $5 million to $10 million in liquidity.
It is also interesting that this development is taking place using PYUSD specifically. One of the notable developments in the crypto industry in the last few years is the level of institutional support it has gotten. One of these has been from PayPal.
Even though many companies were reluctant to embrace crypto years ago and PayPal’s former CEO criticized the industry, things eventually changed. In 2020, PayPal enabled cryptocurrency transactions on its platform which put the industry in a positive light. On top of this, the company launched its own stablecoin back in August 2023.
While PYUSD has the backing of PayPal, it is still working to establish itself in the industry. For example, it has a market cap of $289 million, which is much less than the billions that tokens like Tether have. To grow, PYUSD needs to align itself with top projects and this decision by the Aave community is a step in the right direction. Should this winning streak continue 2024 could shape up to be a very good year for PYUSD.