Decentralized lending protocol Aave has taken a step towards delisting Binance's troubled stablecoin $BUSD. Aave's decentralized autonomous organization (DAO) voted in favor of a proposal to increase the cost of borrowing $BUSD and decrease the revenue earned by its lenders.
The measures are intended to discourage the use of $BUSD on Aave's platform. The vote comes amid regulatory uncertainty around Binance's dollar-pegged stablecoin, which has led to several market participants distancing themselves from it.
The author of the proposal, Marc Zeller, stated:
the circulating supply of $BUSD will gradually trend towards zero over time, making it necessary to offboard the stablecoin.
Aave froze its $BUSD markets ahead of the on-chain vote. The final stage of the governance process will involve changes to the smart contracts controlling borrowing and lending.
Aave held approximately $11 million in $BUSD liquidity from lenders and had $7.6 million in $BUSD loaned out. Zeller urged Aave users to switch to other stablecoins on the platform. Aave's proposal garnered overwhelming support from its DAO members, indicating a consensus to move away from $BUSD.
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