Aave and Balancer implemented a $1 million Treasury swap
The Aave community exchanged tokens for $1 million with another decentralized finance protocol (DeFi) Balancer after a successful vote on the network ended on July 19. Aave DAO exchanged 16,907 AAVE tokens for 200,000 BAL tokens at an estimated rate of 1 AAVE for 11,892 BAL. The treasury swap will lead to the fact that both protocols will become the main holders of each other's tokens.
On Tuesday, a vote was held on a proposal to exchange 200,000 balancer tokens (BAL) worth $1.13 million for 16,907.28 aave tokens (AAVE) worth $1.62 million from the Aave treasury. The proposal provided for combining the received BAL tokens with Ethereum (ETH) in the Aave 80/20 BAL:ETH pool on Balancer.
Aave will then block the liquidity transferred to the 80/20 pool for one year. By locking its liquidity position, Aave will receive veBAL tokens, which the project can use to vote for additional BAL rewards in pools supporting pairs of Aave tokens on Balancer. This may allow Aave to attract more liquidity for its pools on Balancer and gain more revenue from increasing profitability in the process.
When the vote passed, Aave executed a swap at a fixed rate of 1 AAVE for 11,829 BAL tokens. This exchange benchmark compensates for the difference of almost $500,000 in the exchange of tokens at the current spot prices of each coin.
In a sentence written by a LlamaPay participant By Matthew Graham, the token exchange is described as an example of the ongoing collaboration between Aave and Balancer. According to Graham, the exchange of coins is enough for both DeFi protocols to become the main holders of each other's tokens.
"Each community will have an influence on the management process of the other, which will allow them to best represent their interests and cooperate," Graham said in the proposal.
Tuesday's vote is also another treasury exchange involving Balancer. The DeFi liquidity platform has already replaced management tokens with other protocols such as TribeDAO, PrimeDAO, mStable and Gnosis. These swaps are reportedly part of Balancer's efforts to boost liquidity in its veBAL market.
Treasury swaps are also the newest form of treasury management for DeFi protocols against the backdrop of the current bear market. DeFi projects' stock pools have shrunk as the value of their own coins, which often dominate these treasuries, has fallen since the beginning of the year. Many projects are now trying to figure out what measures they can take to prevent a further decline in their income.
https://coin-signal.com/cryptonews/aave-and-balancer-implemented-a-1-million-treasury-swap/
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