The acquisition aims to show support for the DeFi ecosystem and increase liquidity for Aave's stablecoin, GHO.
Aave DAO's community governance process has approved a proposal to strategically acquire CRV tokens, Curve's native token, in exchange for $2 million worth of USDT from Aave DAO's treasury. Led by Marc Zeller of the Aave Chain Initiative, this decision comes after a recent exploit that saw Curve lose over $70 million and CRV's value drop significantly.
Zeller explains that the purpose of acquiring five million CRV tokens with two million USDT is to demonstrate support for the wider DeFi ecosystem and increase secondary liquidity for Aave's stablecoin, GHO. The tokens will be used to incentivize GHO liquidity via locking them to gather Curve voting power and support a GHO-specific Gauge.
Some Aave community members raised concerns about increasing exposure to CRV-related risks. Aave faces potential bad debt if the price of CRV drops below 65% to around $0.32, as Curve founder Michael Egorov took out a considerable loan using CRV as collateral on Aave v2.
Despite these concerns, the acquisition proposal passed, with 58% of voters opting to proceed, and 42% voting against the idea.