TL;DR:
A proposal to increase the GHO borrow rate from 3.00% to 4.72% aims to stabilize its peg and manage supply, with mixed community reactions regarding its effectiveness and potential impact on early adopters. The proposal is in the feedback phase before potentially advancing to Snapshot ARFC and AIP stages.
The discussion revolves around a proposal to increase the GHO borrow rate from 3.00% to 4.72%, which is intended to align with the proposed sDAI rate. The motivation behind this proposal is to address the declining peg of GHO and its increasing supply by reducing the borrowing discount of GHO relative to other stablecoins. The proposal was put forth by TokenLogic, in collaboration with MatthewGraham and ACI's MarcZeller. The community has been invited to provide feedback before the proposal moves to the Snapshot ARFC stage and potentially to the AIP stage.
The community's reaction is mixed. There is support for the proposal from users like Josojo, Gauntlet, and ChaosLabs, who agree with the adjustment and believe that it does not add excess risk. However, there are also concerns and opposition, particularly from Chippervan, who argues that increasing utility would be a better approach than raising borrow rates. They suggest that market conditions influence GHO's peg and propose integrating GHO into other protocols as a more sustainable solution. EzR3aL and 0xTogbe also contribute to the discussion, discussing the impact of interest rate changes and the need for driving liquidity demand through incentive programs and fast-tracking GHO utility.
##](https://governance.aave.com/u/ChaosLabs.
##) Why this is negative?
The next steps include gathering community feedback, then escalating the proposal to the Snapshot ARFC stage, and if successful, to the AIP stage.
Posted a month ago
Last reply 22 days ago
Summary updated 15 days ago
Last updated 09/12 13:52