@Gepetto I used Grayscale’s numbers to make some of my conclusions, you can see them below. Realistically Gho was meant to be a multi-billion dollar product, it’s a failure especially this late in the game. We can try to “soften” how bad it’s gone if we want but the fact is we’re losing money on it and it’s not a launch product it’s a mature one. We’re projected to gain 12.1 mil a year and lose 16.9 mil for a net profit of -4.8mil in 2026 if we choose to maintain Gho. And that’s just the basic costs it doesn’t cover the costs to maintain it technically and the risk that we are forced to cover the whole if it ever gets exploited. Given that our net income is 59.4 mil we basically will be increasing our profit 8% should we choose to switch to Sky as our service provider immediately not even counting what they pay us.
The 70M profit estimate is simple and likely won’t be realized easily. It comes from Sparks 20M annual profit that sky pays it for USDS, Sparks 4.9B market size, and Aave’s 25B market size (20M/4.9B*25B=$102M). Although proportionally it’s 102M I hedged somewhat and guesstimated 70M. That being said we would immediately be turning a loss into a profit and offloading risk and maintenance costs to Sky. So even if it’s never “that” profitable, it would always be positive and you’d assume we’d make at least as much as Spark (20M) which means our profits would increase 33%. And I believe with our greater customer base and reputation we could grow this, especially as Defi enters the age of stablecoins/RWAs/onchain finance where we’d be much better positioned to be profiting off the #3 stablecoin rather than trying to support our own at rank #17 at a loss.
I’ve mentioned that we should hop on a winning horse, Sky is making a net profit of over $120M a year despite having a market cap 1/3rd of ours less than a year ago. Meanwhile we’re making $60M and dealing with the losses from a recent exploit. We’re in no position to compete in the stablecoin market but we do have the ability to partner with someone thats already winning and win with them. There’s no reason for us to be competitors. We can compete with Spark while working with Sky. Sky also has Grove, Defisaver, Ledger, and others offering USDS deposits/withdrawals so they aren’t against having other authorized frontends and they’ve setup a system to tag deposits so that where they are from is tracked and the frontend is paid. I was working to have Lido implement this as well but unfortunately they went with Mellow and failed with only $29M in deposits. Hype went with native for it’s USDH instead of Sky and that failed so badly that Native has now sold the USDH ticker despite it originally being given to Native by Hype in return for a percentage of USDH revenues. Realistically we need to be working with someone who knows what their doing and has the existing support infrastructure to maintain it, the USDC:USDS 1:1 swap backed up by 4.1B in USDC makes USDS so much better than Gho.
I can’t provide “net profitability today” numbers because it’s impossible to predict. I can provide general estimates and show you the logic behind my arguments.
Interesting revenue thesis, but before moving further: can we see a rigorous, protocol‑level risk assessment of importing Sky’s RWA, peg and governance risk into Aave’s core stablecoin stack, and how this compares to simply iterating on a fully sovereign GHO design…?
@MconnectDAO
Honestly I would say we just give up on Gho and support USDS deposits/withdrawals. Offload all risk to Sky the same as when we lend out money based on collateral we aren’t responsible if the collateral issuer itself fails. Have a small disclaimer.
That being said, I do want to point out that Sky is older than Aave, has had less hacks than Aave, and implements rigorous security checks. They have 4.11B in USDC deposited with them thats held by Coinbase and a total of $10.2B in USDS/DAI. Sky Ecosystem
They clearly disclose risks and how they will be covered as well as liquidity waterfalls if issues should occur Sky Ecosystem — Financials They’ve recently cut staking emissions to build up a $125M reserve against any future issues. I believe that DAI/USDS has maintained peg better than USDC/USDT in the past, it’s well trusted. Realistically it’s so old that likely 10-20% of DAI has been lost by now meaning there’s actually a large buffer against depegging inherent in it.
Likely Aave would need a risk advisor or similar to investigate and provide a full report before it went forward with this. But given that Aave has long supported DAI/USDS deposits/borrows it’s not like Aave hasn’t explored the risks of DAI and cleared it before. We’re not talking about adopting a new product here. DAI is old, older than USDC. It’s contracts are heavily audited. Spark uses the Aave V3 code (which they paid Aave for) and Coinbase+Spark deposits are behind most of their collateral. Realistically it’s more likely Gho will be exploited before Dai/USDS is, and if we adopt USDS directly instead of calling it Gho v2 we can offload all the risk while taking the profits.
The only two reasons I could see for keeping Gho are pride or a potential expansion. But after the latest incident and our token plunging around 75% I think it’s too late to have pride and we definitely have no money to fund the mass marketing expansion needed for Gho. So it’s time to admit we should change direction here and take the money that Sky is offering while lower our own risk portfolio/product maintenance. We increase profits instantly 8% by eliminating Gho and if we can achieve what Spark has which should be the bare minimum we then gain an addition 33% for a total of a 41% increase in profits for less risk.
Edited: Wanted to add that the Sky Frontier Foundation estimated 11.5B in USDS supply by q1 2026 and 20.6B by the end of 2026. They’ve already met the first estimate and are on track to meet the second. This is going to be achieved by their rapidly growth due to investing $120M+ in various sub companies they call Stars. Aave is well situated to becoming the gateway (sort of a Hong Kong) to the Sky ecosystem, allowing depositors to receive the additional yield Sky will offer once these Stars are setup and offering 4.5%+ APR. They are a rising horse and it makes sense for us to jump on and become the main platform through which customers interact with them.
Aave currently has over $2B in USDC deposited at 3.21% APR, Sky would offer those customers 3.6% and pay Aave 0.2% to do it. This would serve to boost the APR stablecoin depositors at Aave receive as USDC rates will likely rise boosting Aave’s competitivity as a deposit platform.
