Aave, a decentralized platform facilitating crypto borrowing and lending, is contemplating the inclusion of PayPal’s PYUSD stablecoins into its Ethereum pool.
The platform put forth its integration proposal for the PYUSD stablecoin in December, seeking input from the community through a voting process held from January 8 to January 11.
According to Snapshot data, Aave garnered an overwhelming 99.99% approval from its token holders in favor of incorporating PayPal’s PYUSD stablecoin. Over 460,000 Aave community members expressed their support for onboarding the stablecoin.
The Proposal
Aave emphasized that one of the primary factors influencing the selection of PYUSD is its expanding circulating supply, which has surged by over $230 million, demonstrating increased resilience.
“The introduction of the PYUSD token took place a few months ago, and since its inception, its market cap has seen substantial growth to approximately $230 million.”
Additionally, Aave highlighted its intention to further scale the pool in the upcoming weeks, incorporating incentives to attain the necessary liquidity to uphold the proposed market parameters.
Furthermore, Aave pointed out that the integration would establish synergies between Aave and the stablecoin, fortifying the relationship between PYUSD and Aave’s native GHO stablecoin.
Aave currently holds the position of the world’s third-largest DeFi solution, with nearly $5 billion worth of crypto assets locked, as reported by DappRadar.
The recent voting initiative comes on the heels of decentralized exchange Curve’s decision to integrate the PYUSD stablecoin in December.
Clara Medalie, the Director of Expansion at DeFi research firm Kaiko, noted that the deployment of PYUSD on centralized exchanges indicates its intended use for crypto trading as well. Medalie added that all stablecoins, including PYUSD, face formidable competition from Tether (USDT).
“Competing against USDT will be challenging for PayPal, given that the majority of crypto liquidity is denominated in this stablecoin,” remarked Medalie.
It’s noteworthy that PayPal’s PYUSD is issued by the crypto firm Paxos, which previously issued Binance’s BUSD stablecoin. Following the New York Department of Financial Services (NYDFS) directive in February 2023, Paxos discontinued the issuance of BUSD. Subsequently, Paxos engaged with a digital asset firm named Trident Digital to enhance PYUSD’s on-chain liquidity.
