Aave is among the top lending protocols within the cryptocurrency space. The project has concluded voting that would see it launched on zkSynch. Remember, zkSynch is a zero-knowledge platform testnet.
Moreover, voters approved the deployment by a robust margin, targeting less expensive and quicker transactions. Nevertheless, the latest reports showed the community was ready for another decisive vote, aiming for USDT utility in Aave V3.
The latest proposal highlighted that Aave currently supported DAI and USDC as collateral. That’s because the community trusts the stablecoin boasted lesser risks. The proposal wanted Aave to extend its stablecoin collateral to incorporate USDT.
Market players trust increasing the stablecoins variety on Aave would alleviate risks related to the debacle of either of them. An affirmative vote would present USDT as a reliable stablecoin option in Aave’s collateral. Moreover, it would allow its usage alongside other digital tokens.
Meanwhile, a ‘No’ would restrict USDT’s feature on AAVE. Though the most widely utilized, USDT stablecoin has encountered mixed reviews. That has triggered limitations and concerns about its usage in Aave.
Some USDT Reservations
Tether’s ‘absence’ of transparency fueled USDT skepticism. Reports over the past few days indicated that a United States court directed Tether to present evidence about its backings. Meanwhile, multiple crypto projects collapse amidst Terra USTC’s debacle.
Moreover, some tried to revive from the severe monetary blow. It’s a usual practice to asses a stablecoin’s stability to evade similar vulnerabilities and fluctuations. Though the concerns, USDT still leads stablecoins in market cap & daily volume, according to Coinmarketcap.
Market participants tend to trust the stablecoin as it has been in the space long enough. Moreover, USDT has seen the rise & fall of similar projects. Recently, JPMorgan initiated a move that supported communication between TradFi and DeFi.
Meanwhile, tokenizing the Singapore Dollar and Japanese Yen enabled this transaction on the blockchain. It used the improved Aave Arc to determine its currency exchange and interest rates. That represented a massive forward step as it shows the system’s scalability outside & inside of decentralized finance.
While writing this blog, Aave 3’s TVL stood at $941.5 million (DeFiLlama data). Also, the TVL graph confirmed the value decline. Meanwhile, introducing USD as collateral would increase the protocol’s total value locked. Meanwhile, the coming few weeks will reveal.