Aave Labs' proposal yesterday stated that it intends to update its GSM stability module and integrate asset management giant BlackRock's tokenized fund "BUIDL" to improve the efficiency of the stablecoin system. The proposal is still in the Temp Check stage. .

(Aave’s over-collateralized stablecoin GHO is officially launched! Stakeholders can receive up to 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 (GSM), planning to integrate BlackRock's "USD Institutional Digital Liquidity Fund (BUIDL)" to ensure the stability and redemption of its native stablecoin GHO sex.

Specifically, the proposal seeks to establish a new GSM model that supports external integration to include traditional financial assets including BUIDL, cash, and US Treasury bonds into its stablecoin GHO reserve:

The new GSM is designed to ensure that Aave’s native stablecoin, GHO, maintains 1:1 convertibility with other assets such as USDC.

It is reported that the GSM will use the remaining USDC to purchase BUIDL pegged to the US dollar and provide users with interest from BUIDL, while transaction fees will be accumulated in the GHO stable currency:

Through this proposal, GSM will be able to be more capital efficient and maintain high standards of financial support.

It is not difficult to see that on the one hand, the integration of BUIDL and GSM may expand Aave DAO’s diverse options for income sources from real-world assets (RWA), and at the same time, it may also open up future cooperation opportunities with global financial institutions.

The proposal is currently in the stage of receiving feedback from governance members and may be subject to further voting.

BlackRock’s BUIDL market cap exceeds $500 million

It is not difficult to see from the data of the tokenized asset analysis platform RWA.xyz that the tokenization of RWA (real world assets) has become a hot topic between the encryption industry and traditional finance in recent years.

(MakerDAO announces a US$1 billion investment plan, attracting RWA issuers to participate)

Among them, BlackRock’s BUIDL reached an astonishing scale of US$509 million within four months of its launch, becoming the world’s largest tokenized treasury fund by market capitalization.

Followed by the “OnChain U.S. Government Currency Fund (FOBXX)” launched by Franklin Templeton, closely following with a market value of US$428 million.

However, a previous report by the World Federation of Exchanges (WFE) also revealed that tokenization can be an innovative solution for traditional finance, but it is not a panacea for everyone and still has technical and regulatory limitations.

(Decrypting tokenization: RWA is over-hyped, and asset tokenization will also create problems)

This article Aave Labs proposes to integrate BlackRock tokenization fund BUIDL to improve the efficiency of GHO stability module first appeared in Chain News ABMedia.