A proposal has been put forward by Aave Chan founder Marc Zeller, suggesting that the Aave treasury utilize USDT to acquire $2 million worth of Curve DAO tokens (CRV) from Curve founder Michael Egorov in USDT. The rationale behind this proposition is the escalating risk associated with Curve in decentralized finance (DeFi) protocols.
Zeller's proposal asserts that such an acquisition would send a potent signal, demonstrating DeFi's support for itself, and simultaneously position Aave DAO in a strategic stance amid the ongoing "Curve wars." The goal is to enhance Aave's decentralization of liqui dity on its multi-collateral stablecoin, GHO.
The proposed action involves using 2 million USDT, which currently translates to 5 million CRV tokens. These tokens could then be locked as vecrv for a span of four years, thereby gaining voting rights within the Curve platform. These votes could be utilized d d for GHO Liquidity provision on the Curve network.
Zeller's proposal has elicited mixed reactions from the Aave community. While some criticize the move as unfavorable for Aave stakeholders and lenders, others recommend it as a strategy to mitigate the risks of over-leveraging CRV and foster the growth of GHO.
In a separate development, Jun Du, the co-founder of Huobi, has purchased 10 million CRV tokens from Egorov for $4 million. Notably, Egorov is managing loans exceeding $100 million from various lending protocols. He currently holds a $70 million USDT loan on Aave v2, using CRV as collateral. Aave's risk parameters indicate that a price dip to approximately $0.32 could trigger the liquidation of CRV, which currently trades at around $0.59.
To manage his substantial loan position, Egorov has been rapidly selling CRV tokens, amassing millions of dollars' worth through over-the-counter transactions since the exploitation of the Curve protocol.
