Aave’s token holder community mulls a foray into Bitcoin 
BTCUSD mining with the aim of increasing revenue and accelerating adoption of Aave’s stablecoin, according to a proposal from the decentralized finance (DeFi) protocol governance forum.
The January 15 proposal, which is still awaiting a vote from token holders, was drafted by Blockware Solutions, a Bitcoin mining service provider.
Under the proposal, Aave would hire Blockware to operate Bitcoin mining rigs on its behalf, seeking to achieve “a strong net annualized return of 33.03%” for Aave’s treasury.
Bitcoin mining “not only strengthens the protocol’s balance sheet, but also opens the door to significant capital gains tax depreciation strategies,” Blockware said.
The DeFi protocol would also integrate its stablecoin GHO “directly into the Bitcoin network”. This would “present Bitcoin miners and retail customers with the ability to pay for mining equipment with AAVE (GHO),” the proposal states.
Comments on Aave’s governance forum show skepticism from token holders, including concerns about the profitability and costs of Bitcoin mining.
Aave is a DeFi lending protocol that allows users to borrow cryptocurrency by posting other crypto assets as collateral.
Slow adoption of stablecoin
In July, Aave launched its stablecoin GHO on the Arbitrum network, an Ethereum layer 2 scaling blockchain.
It joined many other DeFi protocols – including Sky (formerly Maker) and Curve Finance – to create a proprietary token pegged to the US dollar.
So far, GHO adoption has been moderate. As of January 16, its market capitalization was approximately $166 million.
That’s nearly 1,000 times less than market leader Tether, whose stablecoin USDT (USDT) boasts a market capitalization of nearly $140 billion.
Growth of Bitcoin mining
Bitcoin miners are increasing production as BTC’s strong performance partly offsets headwinds from the April halving, which reduced mining rewards from 6.25 BTC to 3.125 BTC per block.
Miners have prioritized accumulating BTC on their balance sheets. In December, JPMorgan raised the price targets of four Bitcoin mining stocks to reflect the value of miners’ BTC holdings, the bank said.
Integrating GHO into the Bitcoin network would make it a “Bitcoin-powered stablecoin with real value,” Blockware said.
