[TEMP CHECK] Add rlUSD to Aave v3 Main Market on Ethereum

Governance New Asset
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[TEMP CHECK] Add rlUSD to Aave v3 Main Market on Ethereum

Author: @ACI (Aave Chan Initiative)
Created: 2024-10-08

Summary

The proposal aims to onboard Ripple’s RLUSD stablecoin to the Aave v3 protocol Main Market on Ethereum.

Motivation

RLUSD, a new stablecoin offered by Ripple, is expected to receive NYDFS regulatory approval in the coming weeks and launch on Ethereum soon thereafter.

Ripple, a trusted entity in the cryptocurrency industry, introduces RLUSD with a unique value proposition focused on cross-border payments through its global payment network. RLUSD intends to bridge TradFi with DeFi use cases, starting with its flagship payments products serving customers in over 70 markets. They aim to establish RLUSD as the de facto stablecoin for lending/borrowing, DeFi, repo, Treasury functions, payments, etc., all within the highest levels of compliance.

Onboarding Ripple’s RLUSD extends Aave Protocol’s diverse stablecoin offerings to its users. RLUSD users on Aave Protocol may potentially benefit from future rewards programs. This introduction is expected to increase liquidity and engagement within the protocol.

Aligning with Aave DAO’s commitment to offering diversification across widely held and in-demand assets, onboarding RLUSD will enable users to leverage Ripple’s liquidity and reputation while benefiting from Aave’s established lending and borrowing functionalities. The initial slow launch of RLUSD is expected to benefit from a major integration like Aave Protocol and attract more mainstream users, contributing to the growth and adoption of the platform.

Specification- Ticker: RLUSD

  • Contract addresses will be added during the ARFC stage once RLUSD is fully launched. - Risk parameters will be provided by Risk Service Providers as soon as possible, and the ARFC will be updated with that feedback

Disclosure

The Aave Chan Initiative is not directly affiliated with Ripple and did not receive compensation for creating this proposal.

Next Steps

  1. If consensus is reached on this [TEMP CHECK], escalate the proposal to the Snapshot stage.
  2. If the Snapshot outcome is YAE, escalate the proposal to the ARFC stage.3. Publish a standard ARFC and collect community & service provider feedback before escalating the proposal to the ARFC Snapshot stage.
  3. If the ARFC Snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal.

Copyright

Copyright and related rights waived via CC0.

3 Likes
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The current proposal has been escalated to TEMP CHECK Snapshot.

Vote will start tomorrow, we encourage everyone to participate.

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This brief summarizes the key features, regulatory status, and strategic partnerships of Ripple’s planned stablecoin, rlUSD, based on recent official information and company announcements.

Interim Brief on rlUSD

rlUSD is Ripple’s planned stablecoin for issuance on the XRP Ledger and Ethereum blockchains. It aims to offer a stable store of value backed by a segregated reserve comprising cash and cash equivalents, ensuring a 1:1 redemption ratio with US dollars.

The launch of rlUSD remains contingent upon regulatory approval, as stated on the official rlUSD landing page. The New York Department of Financial Services (NYDFS) is anticipated to be the competent authority for granting such approval, placing rlUSD in the same regulatory category as other prominent stablecoins like those issued by Paxos and PayPal.

To enhance its regulatory positioning and operational capabilities, Ripple has acquired Standard Custody & Trust Company, LLC. This acquisition is significant as Standard Custody & Trust Company obtained its NYDFS license in 2021, potentially expediting Ripple’s regulatory process and strengthening its custodial infrastructure.

NYDFS Regulated Entities
Source: NYDFS, October 15th, 2024

Ripple’s recent media disclosure reveals an impressive roster of partnerships and advisory board members. The company has secured collaborations with several reputable cryptocurrency exchanges, including Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish. Additionally, Ripple has engaged prominent market makers B2C2 and Keyrock to ensure liquidity and market stability for rlUSD.

The advisory board assembled by Ripple underscores the company’s commitment to regulatory compliance and industry expertise. Notable members include former FDIC Chair Sheila Bair, former JPMorgan executive David Puth, and Ripple Executive Chairman Chris Larsen.

Our team will diligently track and analyze the ongoing regulatory approval process. NYDFS licensing necessitates disclosures regarding the composition, management, and auditing of rlUSD reserves, which are key factors in evaluating the robustness of rlUSD’s backing and compliance with regulatory standards. The success and resilience of rlUSD will depend on its ability to meet these stringent requirements and effectively leverage its partnerships for widespread adoption.

1 Like
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After Snapshot monitoring, the current TEMP CHECK Snapshot has ended recently, reaching both Quorum and YAE as winning option with 726K votes.

Therefore the TEMP CHECK has PASSED.

Next step will be the publication of an ARFC to continue gathering both community and Risk Service Provider feedback, before proceeding with next steps if applicable.