Aave Community Turns to High-Yielding Real-World Assets

Crypto News – The “Treasury Proposal for RWA Allocation,” which will be up for temperature check voting until August 25, is a crucial proposal that the Aave community is preparing for.

Aave Community Turns to High-Yielding Real-World Assets

This proposal’s main idea is to use Centrifuge Prime to invest a fraction of the stablecoins that the treasury currently holds in low-risk real-world assets (RWAs). The objectives range from yielding on idle stablecoins to building a strong RWA infrastructure for the protocol’s long-term growth and expanding the DAO’s internal industry knowledge.

Aave Will Collaborate with Centrifuge Prime

The proposal describes how Aave and Centrifuge Prime will work together to lay the fundamental legal and technical foundation for the RWA investments made by the Aave Finance Department. 1 million USDC in short-term US Treasury bonds was what the Ministry of Finance initially sought to invest in.

It is intended for this allocation to steadily increase, with the goal of making up to 20% of the stable currency holdings. Additional yields could be added in the future, pending governance permission. According to the proposal, almost $15 million, or 65% of the Aave Ministry of Finance’s treasury bonds, are held in USDC.

What is the Main Purpose of this Initiative?

On the other hand, the DAO has so far ignored the 5% income offered by risk-free overnight funding of US Treasury holdings. There is a lot of unrealized potential, as only a $5 million investment might generate a $250,000 yearly income. It highlights the initiative’s larger goal. Aave’s previous support of RWA initiatives and its willingness to diversify away from crypto-specific assets are significant considerations.