Aave Community Approves PayPal’s Stablecoin Integration

• Aave Considers Integrating PayPal's PYUSD Stablecoin
• Details of the Governance Vote
• About PYUSD
• Aave's Position in the Market
• Trident's Proposal for AAVE's PYUSD Integration
• Trident's Incentive Strategy

Aave Considers Integrating PayPal's PYUSD Stablecoin

Decentralized lending and borrowing platform, Aave, is currently holding a governance vote to decide on the integration of PayPal's PYUSD stablecoin, issued by Paxos Trust Company. An overwhelming 99.98% of the participating AAVE token holders are in favor of integrating PYUSD into Aave's Ethereum$2,315 -2.42% pool.

Details of the Governance Vote

The governance vote, dubbed a 'temperature check', was put forth by Trident Digital on December 18, and is expected to conclude later on Thursday. This follows the decision made by decentralized exchange Curve in December to host PYUSD.

About PYUSD

PYUSD, a dollar-backed stablecoin, was established in August and has since achieved a market capitalization of $289 million. This represents a mere 0.3% of industry leader tether's market cap of $94 billion.

Aave's Position in the Market

Aave serves as a decentralized finance protocol that allows users to lend and borrow funds without the need for an intermediary. According to DappRadar$0.0070 2.16%, Aave is the third-largest DeFi solution globally, having nearly $5 billion worth of crypto assets locked into the protocol.

Trident's Proposal for AAVE's PYUSD Integration

Trident Digital's proposal suggests that Aave's integration of PYUSD would foster synergies with PayPal's stablecoin and strengthen the relationship between PYUSD and Aave's decentralized multi-collateral stablecoin GHO. Trident, which is currently incentivizing the PYUSD/USDC liquidity pool on Curve, has pledged to contribute between $5 million and $10 million in liquidity for PYUSD on Aave from the outset.

Trident's Incentive Strategy

Trident's strategy is centered around maintaining high yields on Curve, thus stimulating organic borrowing demand for PYUSD on Aave. While Trident does not plan to provide direct incentives on Aave, they believe that their overall incentive strategy will set the stage for borrowing demand on day one.

Edited by Jonathan Stoker