Content
@
0 reply
0 recast
0 reaction
Tonyp
@tonyp
Has GHO been successful for AAVE? Currently $40M lent at 8.24%, which creates $3.3M/yr in revenue, but $13.8M of that is stkGHO in the safety module paying out $4.5M/yr. Has anyone built a decentralized stablecoin that isn't just a big wealth transfer from gov token holders to borrowers?
3 replies
0 recast
2 reactions
Brent Fitzgerald
@bf
Can you explain how it’s a wealth transfer? To me it looks like net income for the DAO, albeit limited due to lack of GHO use cases.
1 reply
0 recast
0 reaction
Tonyp
@tonyp
A CDP with no natural demand (other than borrow->sell) has two options to maintain peg, reduce supply to match demand or subsidize demand. GHOs below market rates and high emissions to create demand means AAVE holders are “paying” GHO borrowers to borrow & sell.
1 reply
0 recast
0 reaction
Brent Fitzgerald
@bf
Ah so the standard situation of a project subsidizing users for the risks/costs of holding their token to bootstrap engagement/circulation in hopes it’ll start a flywheel.
1 reply
0 recast
0 reaction
