The Aave community is currently considering a proposal to freeze the BUSD reserve on the Aave V2 market in light of Paxos’ move to stop minting BUSD.
BUSD issuer Paxos announced on Feb. 13 that it would cease minting BUSD from Feb. 21, 2023, but the token will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024.
Aave integration lead Marc Zeller has initiated a proposal to freeze the BUSD holding on Aave V2, as he believes the circulating supply of BUSD is expected to fall near zero over time, as there is no potential for BUSD to continue growing.
“It seems that the most reasonable path for Aave is to freeze this reserve and invite users to switch to another stablecoin among the diversity present in Aave,” Marc said.
The proposal will undergo the standard governance process for the Aave community to vote on the optimal choice needed to preserve the DAO Treasury.
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