Aave’s proposed USAT gateway could cut off the return swap after a deposit

Aave’s proposed USAT gateway would require approval for every return swap, allowing access to be revoked after an institution had exchanged its deposit receipts for GHO.

TokenLogic’s Oct. 15 governance proposal would introduce a permissioned GHO Stability Module, or GSM, on Avalanche. It would let approved counterparties exchange waUSAT, a receipt for the dollar stablecoin USAT supplied to Aave V4, for GHO. Approval would apply in both directions, so revocation could prevent a participant from returning GHO to recover waUSAT.

That creates three separate conditions on the route back to dollars: access to the return swap, the ability to withdraw underlying USAT from lending, and eligibility to redeem USAT with its issuer, Anchorage Digital Bank.

As of Oct. 18, the public proposal still describes a Snapshot vote followed, if approved, by an implementation proposal as its next steps. Important addresses and contracts remain unspecified.

The proposed entry route involves two transactions. An approved counterparty would supply USAT to Aave V4’s Tokenization Spoke and receive waUSAT. It would then exchange those receipt tokens for GHO through the GSM, which would hold the waUSAT while the USAT remained supplied to Aave.

The return swap would therefore recover a receipt token. It would not directly deliver USAT or dollars.

The permission check would apply to the swap originator every time. TokenLogic explicitly says that revoking approval would prevent further swaps, including exchanges intended to recover previously deposited assets.

An approved originator could name another recipient or have a relayer submit a valid signed swap. Neither would need separate participant approval, but those options would preserve the approval requirement on the originator.

GHO received through the module would remain freely transferable. Aave’s GHO documentation distinguishes ordinary transfers from GSM conversions, so a participant whose module access was revoked could still transfer GHO.

The proposal would also retain emergency controls. Freezing would halt exchanges; seizure would transfer module-held assets to the designated treasury and prevent further exchanges. Those powers are distinct from revoking an individual participant’s approval. TokenLogic says restrictions on reversing a swap would need to be reflected in counterparty agreements.

Shared inventory would determine what can come back

The initial whitelist would include a commercial counterparty and an Aave DAO Safe controlled by the Aave Finance Committee. Both would use the same liquidity and pricing. The module would not keep individual principal balances or require a participant’s swaps to match its earlier deposits.

Recovering waUSAT would leave a second step: obtaining the USAT represented by those shares. TokenLogic says that would depend on the selected integration and available liquidity. V4 withdrawals require a sufficient withdrawable amount and an unpaused reserve. The final USAT receipt-token integration remains unspecified.

CryptoSlate’s earlier GHO liquidity coverage described a related distinction between redeeming sGHO for GHO and converting that GHO into reserve stablecoins. The USAT design would add continuing participant approval to the conditions governing a conversion.

The proposal separates reserve funding, the module’s draw limit and its asset exposure cap:

The specification lists zero fees for both swap directions while leaving the pricing strategy and its address to be determined. The executable quote would depend on that final strategy; the proposed zero swap fees would not remove the issuer’s separate redemption fee.

Funding would also require reconciling the bridge table: its 66 million GHO outbound capacity is labeled 110% of initial funding, but 110% of 65 million GHO is 71.5 million. The intended setting remains unresolved. After funding, proposed ongoing capacities would return to 5 million GHO each way, with a 1,000 GHO-per-second refill rate.

Dollars would require a separate issuer relationship

Anchorage’s current contract table lists USAT on Ethereum and Celo, without an Avalanche entry. Its policy distinguishes issuer-designated supported USAT from third-party derivatives and wrappers.

The bank’s USAT policies limit issuance and redemption to clients with an account relationship in good standing under a written agreement. Holding USAT alone does not create that relationship. Clients must have the necessary assets at the bank, and completion requires processing and settlement.

The policy describes conversion at one dollar per USAT, net of fees, while allowing requests to be delayed, restricted or refused for legal, risk or operational reasons. The written client account agreement governs the relationship.

USAT also follows a distinct operating route. Anchorage’s stablecoin documentation excludes its minting and burning from the normal Convert interface and requires separate onboarding to Hadron, a third-party interface.

The USAT fee schedule effective Oct. 9 charges 10 basis points for redemption. That issuer fee would be separate from the GSM’s proposed zero swap fees.

LlamaRisk’s Oct. 12 Ethereum assessment cites due-diligence correspondence and reports an ordinary $1 million mint/burn minimum, limited test exceptions and settlement constraints tied to cash availability and U.S. business days.

LlamaRisk also reports about $10.02 million in the main Ethereum Curve USAT/USDT pool.

The proposed Avalanche USAT, waUSAT, reserve and commercial counterparty addresses remain unfilled, along with pricing and fee strategy contracts and the automatic freezer/oracle selection. The proposal does specify numerical swap fees and freeze/unfreeze price bounds, so the unresolved work concerns implementation as well as commercial terms.