Aave Labs proposes integrating the tokenized fund BUIDL by BlackRock to enhance the efficiency of the GHO stability module.

The proposal from Aave Labs yesterday indicated its intention to update its GSM stability module by integrating "BUIDL," the tokenized fund from asset management giant BlackRock, to enhance the efficiency of the stablecoin system. The proposal is currently in the temperature check phase.

Aave's overcollateralized stablecoin GHO is officially launched! Depositors can enjoy up to a 30% interest rate discount.

Aave Labs Proposes Integrating BlackRock Tokenized Fund into GSM

Aave Labs has put forward a new proposal to update its GSM stability module, planning to integrate BlackRock's "USD Institutional Digital Liquidity Fund BUIDL" to ensure the stability and redeemability of its native stablecoin GHO.

Specifically, the proposal seeks to establish a new GSM model that supports external integrations to include traditional financial assets such as BUIDL, cash, and U.S. Treasury bonds into its stablecoin GHO reserves:

The new GSM is designed to maintain a 1:1 peg of Aave's native stablecoin GHO with assets like USDC.

Reportedly, this GSM will utilize remaining USDC to purchase BUIDL pegged to the U.S. dollar and provide users with interest from BUIDL, while transaction fees will accumulate in the GHO stablecoin:

Through this proposal, the GSM aims to be more capital efficient and maintain high standards of financial backing.

It is evident that the integration of BUIDL with GSM not only expands Aave DAO's sources of real-world asset RWA revenue but also opens up potential collaboration opportunities with global financial institutions in the future.

Currently, the proposal is in the stage of receiving feedback from governance members, with further voting anticipated in the future.

BlackRock's BUIDL Market Cap Surpasses $500 Million

Analysis from the tokenized assets platform RWA.xyz reveals that the tokenization of Real-World Assets (RWA) has become a hot topic in both the crypto industry and traditional finance in recent years.

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BlackRock's BUIDL achieved an impressive scale of $5.09 billion within four months of its launch, becoming the world's largest tokenized treasury fund.

Following closely is Franklin Templeton's "OnChain U.S. Government Money Fund FOBXX," with a market cap of $4.28 billion.

However, the World Federation of Exchanges (WFE) previously reported that while tokenization can be an innovative solution for traditional finance, it is not a one-size-fits-all remedy and still faces limitations in technology and regulation.

Decrypting Tokenization: RWA Overhyped, Asset Tokenization Can Pose Issues