According to Aavegotchi, the game-earning non-fungible token (NFT) protocol, the entity closed the bonding curve defining the exchange rate between its Aavegotchi (GHST) token and Da on March 11, A stablecoin pegged to the U.S. dollar. On the same day, DAI lost its USD peg due to the ongoing fallout from the collapse of Silicon Valley banks and the USDC
decoupling. USDC’s decoupling was caused by $3.3 billion in stablecoin-collateralized deposits stranded at the now-defunct Silicon Valley Bank.
In a statement to Cointelegraph, Nigel Carlos, chief marketing officer at Pixelcraft Studios, explained that the community voted to end the two-and-a-half-year contract sale of its native GHST token at 2 a.m. UTC today and “get rid of the DAI from the DAI.” Ross said: "The vote closed a smart contract (bonding curve) that provided liquidity for the minting and burning of GHST, the base currency and governance token of the Aavegotchi ecosystem, with a market cap of over $76.6 million and a total supply of 54.6 million .It is tied to DAI and has a DAI library in a smart contract."
According to Carlos, GHST is now a fixed-supply token, and the contract used to mint GHST’s $33 million DAI tokens is “planned to be used to develop an ecosystem for gaming protocols.” GHST is described as Aavegotchi's "ticket of entry" into the gaming protocol. Users can use tokens to purchase NFT portals, wearables, and consumables within the Aavegotchi game, stake for rewards, and participate in Decentralized Autonomous Organization (DAO) governance. The Aavegotchi bonding curve was created on September 14, 2020, with an opening price of 0.2 DAI per GHST.
The Bonding Curve smart contract powered by Aragon ensures that new GHST tokens are generated when a user purchases GHST with DAI, and vice versa. However, when purchasing GHST tokens, each subsequent buyer must pay a slightly higher price per token, causing GHST to have a market cap higher than its DAI reserves.
In what was essentially a multi-year token sale, the protocol received a total of 30.3 million DAI. The developers first proposed in January that DAI funds should be distributed among Protocol Liquidity (20%), Aavegotchi DAO (40%) and its parent company Pixelcraft Studios (40%).
With the bond curve removed, the GHST exchange rate is now free-floating and no longer determined by DAI. At the time of publication, the token’s value has plummeted 18.09% to $1.12 over the past 24 hours. Meanwhile, the price of the DAI stablecoin is down 6.76% over the past 24 hours to $0.9314. Although no longer linked, the proceeds from the token sale suffered a significant loss due to the DAI depeg event.
