The Proposal To Freeze BUSD On Aave V2 Received Unanimous Approval
- The governance page reveals that on February 26 the Aave community’s motion to “freeze BUSD on Aave V2” was approved with 100% voting yes.
- Trading in Binance USD (BUSD) has dropped it out of the top 10 by capitalization, while Tether (USDT) now accounts for over 50% of the market.
The governance page on February 27 reflects that the Aave community’s request to “freeze BUSD on Aave V2” was approved by a unanimous vote on February 26 and went into effect the following day.
According to the proposal, the value of the BUSD holdings in the DAO collector contract is around $10,500. The concept presupposes that the overall quantity of this stablecoin assets now in circulation will eventually be reduced to zero. If new BUSD can not be issued, it might be detrimental to peg arbitrage prospects and asset pegs that are not tied to assets with true growth potential. Because of this, it would make the most sense for Aave to put a stop to withdrawals from this reserve and instead urge customers to use a different stablecoin.
The Paxos incident has significantly harmed the market value of this reliable stablecoin. As reported by Coincu, BUSD is no longer among Coingecko’s top 10 stablecoins. It doesn’t take long for BUSD to vanish from the list of stablecoins available on the market. Despite Paxos’s best efforts to keep the margin and convert BUSD to cash, this stablecoin is losing ground in the market. With no capacity to create new currencies and Paxos’ continual burning of coins, the current supply of this stablecoin is just over 10.98 billion tokens, a loss of about 31% in the previous 30 days.
Following the event, BUSD’s market value fell from sixth to eleventh on CoinGecko’s rankings. Of all cryptocurrencies, Tether (USDT) stands to gain the most from retaining its own identity. Throughout the past 30 days, the total amount of USDT available has increased by about 5%.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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