Aave Approves OTC Purchase of $2 Million Worth of CRV Tokens
Following Binance Labs' $5 million investment, Aave has joined the "rescue squad" by deciding to purchase $2 million worth of CRV tokens over-the-counter (OTC).
Key Details:
- Proposal Approval: Aave has executed proposal AIP-289, exchanging 2 million USDT for 2 million USD worth of aCRV from Curve founder Michael Egorov's wallet.
Earlier today AIP-289 was executed.
— Marc “Billy” Zeller 👻 🦇🔊 (@lemiscate) August 12, 2023
In a single tx and & in a trustless manner, aCRV was transferred from Mich's wallet to the Aave DAO treasury, and USDT was taken from the treasury to repay 2M USDT debt on Aave V2 on his behalf.
Auditable & trustless.https://t.co/InapLHg8LL pic.twitter.com/X8MqddUVmY
Transaction Execution:
- Process: In a single, trustless transaction, aCRV was transferred from Egorov's wallet to the Aave DAO treasury, and USDT was taken from the treasury to repay Egorov's 2 million USDT debt on Aave V2.
Background:
- Collateral Loan: Egorov's collateralized loan using CRV has been a focal point recently. He has been selling significant amounts of CRV through OTC deals to accumulate stablecoins, bringing his loan position back to normal levels.
- Continued Sales: Despite these sales, Egorov continues to offload large amounts of CRV, indicating an ongoing effort to stabilize his financial position.
Participants in OTC Deals:
- Involved Entities: The OTC deals have involved prominent investors and funds, including Wintermute, DWF Labs, Gnosis, Yearn Finance, Cream Finance, Reserve Protocol, Stake DAO, and individuals like Justin Sun, Huobi founder Du Jun, and DCF GOD.
The Aave community has passed the "aCRV OTC" proposal, suggesting to use 2 million aUSDT from the Aave DAO treasury to strategically acquire 5 million aCRV tokens to support the DeFi ecosystem and benefit GHO's secondary liquidity. The proposal is scheduled to be implemented…
— Wu Blockchain (@WuBlockchain) August 11, 2023
Aave's Strategic Move:
- Investment Decision: Following Binance Labs' $5 million investment in CRV on 10/08, Aave's community has voted to purchase CRV worth $2 million at a price of $0.4 per CRV, equating to 5 million CRV tokens.
- Debt Repayment: The USDT will be directly sent to Egorov's loan position on Aave, helping to pay off his remaining debt.
Benefits for Aave:
- GHO Stablecoin: The acquisition of CRV tokens will support Aave's GHO stablecoin by providing voting power for governance proposals beneficial to GHO on Curve.
- Liquidity Contribution: As Curve is a crucial stableswap protocol in the DeFi ecosystem, adding liquidity for various stablecoins, including GHO, this move is strategically advantageous for Aave.
Market Impact:
- CRV Price Stability: The price of CRV has remained stable, trading around $0.6 USD with little fluctuation over the past 24 hours.
Aave's approval and execution of the OTC purchase of CRV tokens reflect a strategic move to strengthen its position in the DeFi ecosystem, particularly in relation to its GHO stablecoin. This investment is part of broader efforts to support Curve and ensure stability within the DeFi space.
