Mar 12, 2023
Aavegotchi Closes Bonding Curve, GHST Value Plunges 18.09%
Nonfungible token (NFT) protocol Aavegotchi has announced the closure of its bonding curve defining the exchange rate between its Aavegotchi (GHST) token and the Da (DAI) U.S. dollar-pegged stablecoin. The closure took place on March 11th, the same day as the depegging of DAI and the USD Coin (USDC) due to the collapse of Silicon Valley Bank, which caused $3.3 billion in stablecoin collateral deposits to become stuck.
Nigel Carlos, the chief marketing officer of Pixelcraft Studios, the parent company of Aavegotchi, explained that the community voted at 2 am UTC to end the two-and-a-half-year contract sale of GHST and “derisk from DAI.” He noted that the smart contract that provided liquidity for the minting and burning of GHST was closed, and that the token is now a fixed-supply asset with a market cap of over $76.6 million and a total supply of 54.6 million. The $33 million in DAI tokens that were spent to mint GHST will be used to develop the gaming protocol’s ecosystem.
GHST is an “entry ticket” into Aavegotchi, allowing users to purchase NFT portals, wearables and consumables within the Aavegotchi game, stake to farm rewards, and participate in DAO governance. The Aavegotchi bonding curve was created on September 14th, 2020, with an opening price of 0.2 DAI per GHST. When users purchased GHST via DAI, the bonding curve smart contract — powered by Aragon — ensured new GHST tokens were minted and vice versa.
In total, the protocol has received a total of 30.3 million DAI. Developers proposed in January that the DAI funds should be distributed for protocol liquidity (20%), the Aavegotchi DAO (40%) and its parent Pixelcraft Studios (40%). With the bond curve removed, the exchange rate of GHST is now free floating and no longer determined by DAI. At the time of publication, the token’s value had dropped 18.09% in the past 24 hours to $1.12.
The depegging of DAI and USDC has caused a material loss to the proceeds received from the token sale. As such, many in the web3 space are now looking for ways to promote and market NFTs, such as through Twitter NFT marketing, and are turning to NFT marketing agencies and web3 agencies for assistance. Such agencies can help creators develop and execute a comprehensive NFT marketing strategy to help them successfully sell NFTs.
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