Aave Labs proposes an update to the GHO Stability Module (GSM) by incorporating BUIDL, BlackRock’s tokenized fund, to improve the stability and convertibility of the GHO stablecoin, while offering dividends in BUIDL and swap fees in GHO.
BUIDL: Bridging Traditional and Decentralized Finance
BUIDL is a tokenized fund issued by BlackRock, the world’s largest asset manager. This fund represents traditional assets such as liquidity and US Treasury bonds. Since its launch, BUIDL has quickly gained popularity, accumulating over $509 million in value, making it the world’s most valued tokenized fund according to Etherscan data. This success has also caught the attention of DeFi protocols, which have started to utilize BUIDL for their derivatives products.
A Strategic Integration for Aave
Aave Labs proposes to create a new instance of the GSM capable of supporting external integrations, specifically with BUIDL. This contract will allow for the exchange of tokens at a predetermined fixed ratio, ensuring the convertibility of GHO with other assets while improving capital efficiency. In particular, the integration with BUIDL could enable users to receive monthly dividends in BUIDL while accruing swap fees in the GHO stablecoin.
The integration of BUIDL into the GSM is not just a technical update. Aave Labs anticipates that this could open new opportunities for the Aave DAO by expanding yield sources to real-world assets and forging future strategic partnerships with BlackRock. This integration could not only strengthen the stability of GHO but also attract new institutional investors to the DeFi ecosystem, offering them stable returns backed by real-world assets.
The proposal to integrate BUIDL into Aave’s GSM is currently in the “temperature check” stage. This means that the proposal is still in the feedback phase from Aave’s governance members. If the community expresses a favorable opinion, AAVE token holders will be able to vote on the implementation of this project.
