Marc Zeller, the founder of governance delegate platform Aave Chan Initiative, proposed acquiring CRV tokens from Curve founder Michael Egorov, who is currently on the ropes attempting to protect his debt positions from being liquidated.
The proposal calls for the Aave decentralized autonomous organization (DAO) to buy $2 million worth of CRV using USDT from the protocol’s Treasury. The acquired tokens would be used to incentive liquidity for Aave’s newly launched decentralized stablecoin GHO.
“A 2M USDT worth of CRV acquisition would send a strong signal of DeFi supporting DeFi, while allowing the Aave DAO to strategically position itself in the Curve wars, benefiting GHO secondary liquidity,” wrote Zeller in Aave’s governance forum.
The community’s response to the proposal was mixed. Some users opined that the move would be a win-win for Aave as it would de-risk the current CRV over leverage, while also supporting GHO’s growth. Others believe the proposal does quite the opposite, arguing that Aave should be looking for ways to reduce its exposure to CRV liquidation instead of increasing it further.
“This proposal suggests to use the treasury USDT (funds that would be needed to cover losses in case of CRV liquidation), to increase even more Aave exposure to CRV. This is a joke and goes against the best interest of both Aave stakeholders and Aave lenders, just to help a user who took too much leverage. How is this decentralized finance?” stated one user on the governance forum.
Egorov’s on-chain debt still stands at $80 million despite his best efforts to raise liquidity, most of which has been through over-the-counter (OTC) deals.
Who is buying?
— olimpio (@OlimpioCrypto) August 2, 2023