Voting to onboard PayPal’s PYUSD stablecoin, issued by Paxos Trust Company, is being conducted by the decentralised non-custodial lending and borrowing protocol Aave.
99.98% of AAVE token holders taking part in the ongoing governance vote are in favour of adding PYUSD to AAVE’s Ethereum-based pool. The plan, dubbed a “temperature check,” was put up by Trident Digital on December 18. Voting on it will conclude this Thursday. The vote comes after decentralised exchange Curve decided to host PYUSD in December.
The dollar-pegged stablecoin PYUSD was launched in August and now has a $289 million market capitalization, which is 0.3% of the $94 billion market capitalization of the market leader Tether.
With the help of the decentralised finance protocol Aave, users can lend and borrow money without the need for a middleman. AAVE is the third-biggest DeFi solution globally, according to DappRadar, with about $5 billion in cryptocurrency assets locked into the system.
According to Trident’s proposal, AAVE’s integration of PYUSD will enhance the bond between PYUSD and AAVE’s decentralised multi-collateral stablecoin GHO and foster synergies with PayPal’s stablecoin.
The firm stated in the governance proposal discussion that Trident, which is rewarding the PYUSD/USDC liquidity pool on Curve, will provide $5 million to $10 million in liquidity for PYUSD on AAVE from the beginning.
“The goal is to maintain relatively high yields on Curve. As a result, there will be natural demand for PYUSD borrowing on AAVE. Therefore, even though we don’t plan to offer direct incentives on AAVE, we think that our entire incentive plan will enable borrowing demand from the outset,” Trident stated.