Aave MakerDAO DAI launched a proposal to counter the threat of expansion
Lending protocol Aave has launched a new Aave Risk Framework Committee (ARFC) proposal to adjust the risk parameters of the Dai (DAI) stablecoin.
The Aave Chan Initiative (ACI) team presented the proposal, which suggested that DAI's loan-to-value ratio (LTV) be fixed to 0% on all Aave deployments.
The proposal, released on April 2, suggests removing partial sDAI incentives from the Merit program, effective from Merit Round 2 and beyond.
This move is aimed at countering MakerDAO's recent aggressive D3M plan, which could soon reach 1 billion DAI by rapidly expanding the DAI credit line from zero to an estimated 600 million DAI in a month.
The proposal seeks to reduce risks with minimal impact on users, as DAI deposits are used as collateral on Aave, so users can easily convert to USD Coin (USDC) or Tether (USDT) as collateral options.
The proposal was submitted to EULER, demonstrating low-risk withdrawal practices such as with Angle's AgEUR (EURA), and was approved within a week.
Angular, an overarching stablecoin protocol, and AgEUR, a decentralized euro stablecoin, exemplify the risk of a DAI stablecoin being converted when used as collateral on AAVE.
Decentralized financial protocol MakerDAO has begun preparations to launch its highly-anticipated “Endgame” transformation, positioning the platform for “sustainable resilience and sustainable user growth,” according to co-founder Rune Christensen.
In forum posts on March 12, Christensen announced the start of the “startup season” of the decentralized finance (DeFi) lending protocol, revealing a five-phase plan.
Phase 1, planned for mid-2024, involves engaging an external marketing firm to transform the operation into a more streamlined and exciting concept.
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The ultimate goal of the endgame is to grow the protocol's decentralized stablecoin, DAI, from its current $4.5-billion market capitalization to “100 billion and more,” on par with rival Tether USDT.
MakerDAO converts each Maker (MKR) token into 24,000 NewGovTokens. Additionally, NewStable Token holders who do not reside in the United States can farm 600 million NewGovTokens per year.
In the year On March 6, Eigenlayer overtook lending giant Aave, commanding $11.5 billion in total value locked (TVL) to become the second largest DeFi protocol in DeFi — behind Ethereum's liquid staking protocol Lido.
Ave, meanwhile, has more than 5,700 daily active users, while Lido has less than 430, according to Token Terminal data.
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