Gho V2 – Partnering with Sky Protocol and becoming profitable

Aave’s Gho experiment has been a failure. The product is now maintained at a loss and expansion has been minimal with Aave subsidizing it just to keep it alive. There is only 126M deposited in sGho. Aave’s profits come from it’s lending business. Meanwhile Spark, Aave’s competitor, has $4.26B USDS deposited with them. Spark, Sky’s Aave-like Star is able to undercut Aave’s rates via subsidizing it’s lending with it’s USDS deposit revenues. They make approximately 0.2% annual on each USDS deposited. This gives them approximately $20M annually in profits. Spark Data Hub if you proportionally equivalate this based on market size, this would mean approximately $70M a year for Aave in profit with Sky maintaining almost all the infrastructure and bearing the risk. Benefits of partnering with Sky for Gho v2 -1:1 USDC:Gho swaps, no need to maintain liquidity in liquidity pools, Sky maintains $4.1B in USDC liquidity for swaps. Aave users can deposit USDC to receive Gho deposit rates and withdraw from sGho as USDC. -Nearly 0 cost, Sky pays interest on all deposits, Aave receives a percentage of the rate -Focus, Sky takes care of all development allowing Aave to focus on the products that make money. Realistically Sky is focused on boosting yields on deposited USD which has led to their focus on RWAs and other investments, something that would require a lot of work for Aave to setup especially as Aave benefits minimally off a 0.1% increase in APR on Gho (off of $100M) while Sky will fighting for an extra 0.1% due to it’s $10B. -Gho will become a stablecoin issued by a company with a S&P credit rating -Aave would maintain the ability to freeze Gho v2 in an emergency I reference Rune’s (Co-founder of Sky) USDH proposal for Hyperliquid as that gives a list of why Sky would be the best choice to partner with for Gho. Rune on X: "USDH powered by Sky The best stablecoin offers so much more than just a stable medium of exchange - it should also deliver highly efficient returns, generated by actively developing, building and growing the ecosystem it lives in. By using Sky to power USDH, the Hyperliquid" / X It makes no sense to compete in a losing battle when you can partner and win. Spark currently makes all its profits from it’s stablecoin business with Sky, there is no reason Aave shouldn’t pursue a stablecoin business as well. Sky has made it clear that they are open to authorized frontends from reputable providers. Note that even should this proposal be accepted, it would need to be voted on by the Sky and Aave communities. But I will point out that both communities like money. Full disclosure: I am a large holder of Sky and a medium holder of Aave. I lost a lot of money when Aave dumped. I’d like Aave to go back up. Because of Sky’s anonymity requirements I cannot disclose if I am a delegate of Sky or not. I will also paste the below, the fact is when a horse is winning you jump on. Crypto lending is down, we’re entering the world of stablecoins and RWAs. Time for Aave to adapt with the times and make a large profit doing so. Gho has failed, time to adapt and partner to win. And realistically it would probably make more sense to just adopt USDS entirely thus offloading all risk while making the same money. 1 post - 1 participant Read full topic