Aave Labs Unveils Plan to Stabilize GHO Using BlackRock’s BUIDL Stake

Aave Labs has proposed an update to its GHO Stability Module (GSM) that involves using shares of BlackRock’s tokenized fund BUIDL to help maintain its stablecoin’s USD peg. According to the proposal, the new GSM would allow Aave to redeem BUIDL shares with user-provided USD Coin (USDC) to mint its ecosystem’s native USD-backed stablecoin, GHO. These tokens would be held in a smart contract until users redeem their GHO for USDC. BUIDL’s shares are valued at $1 per token, paying daily returns to investors every month. The fund divides its assets between cash, U.S. Treasury bills, and repurchase agreements. According to RWA.xyz, BUIDL has over $502 million in assets under management (AUM).