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“It is necessary to implement an offboarding plan for BUSD on the Aave V2 Ethereum market. If you're providing $BUSD liquidity your revenue will go down & if you're borrowing it the cost of your borrow will increase.”
The Aave (AAVE) DAO community voted to offboard Paxos-issued Binance USD (BUSD) from the Aave V2 Ethereum market.
At the beginning of March, Marc Zeller, the founder of Aave Chain Initiative, submitted a proposal to discourage the use of BUSD. According to him, the regulatory crackdown on BUSD will cause the remaining supply of the stablecoin to drop to zero over time.
He suggested increasing the cost of borrowing BUSD while lowering the interest earned by lenders, thus incentivizing users to shift to other stablecoins.
In a few hours I'll publish an AIP to enable the $BUSD Offboarding plan.
— Marc Zeller 👻 💜 🦇🔊 (@lemiscate) March 9, 2023
If this vote pass,
If you're providing $BUSD liquidity your revenue will go down & if you're borrowing it the cost of your borrow will increase.
Feel free to switch to others stablecoins in Aave. pic.twitter.com/TypMFM9vfk
Marc Zeller’s latest proposal was supported by a majority of Aave DAO members, with over 99% of the voters backing his suggestions. Zeller has also created an Aave Improvement Proposal (AIP) to implement these changes. According to a recent tweet, the voting for the AIP will commence on March 10.
The news follows a recent development in February when Zeller proposed freezing BUSD reserves on the Aave V2 protocol. The terms of the proposal were executed on February 26 after it received overwhelming support from the Aave DAO community.