A new development took place in the decentralized lending platform Aave. Binance-linked stablecoin of US government agencies BUSD After increasing the pressure on the DAO formation, it started a vote to delist BUSD from the debt market.
The offer submitted yesterday, Aave DAO It has already garnered great support from its members. The proposal to delist was put to a vote by Marc Zeller, a recognized member of the Aave community.
In a few hours I’ll publish an AIP to enable the $BUSD Offboarding plan.
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 👻 💜 🦇🔊 (@lemiscate) March 9, 2023
Zeller wants to prevent a possible liquidity crisis on the platform due to Paxos no longer issuing BUSD. The termination of the issuance may cause the BUSD supply to fall to zero in the future.
At the end of February, the New York Fiscal Authority sent a circular to Paxos to stop issuing BUSD. The US-based crypto company had to comply with the decision.
After the negative developments, BUSD borrowing cost in the debt market of Aave V2 increased significantly, while the deposit interest decreased.
Crypto Industry Withdraws From BUSD
Aave was not the only crypto startup that gave up holding BUSD after the sanction imposed on Paxos. Centralized crypto exchange Coinbase offers BUSD trading pairs. “because it does not meet the listing requirements” announced that it would remove it from the platform.
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