The largest GHO whale has minted approximately 17.5% of all circulating GHO, equating to 15.5 million GHO.
This whale’s strategy involves using sDAI as collateral to mint GHO and subsequently depositing the minted GHO into the safety module pool to earn both GHO and AAVE incentives.
With the current sDAI DSR at 8% and the added incentives from the GHO program, this whale effectively earns an additional 20% APR by depositing into the safety module, making it a profitable strategy for their $22 million worth of stablecoins.
This strategy is noteworthy for several reasons:
1. Market Impact: The whale’s actions could significantly influence market dynamics. If the DSR or GHO incentives were to decrease, the whale might close their position. This could lead to a sudden influx of GHO in the market, potentially affecting the circulating supply and market liquidity.
2. Liquidity Provider Behavior: Current liquidity providers (LPs) in automated market makers (AMMs) might shift their liquidity if they observe substantial changes in the circulating supply of GHO. This could alter the dynamics of liquidity pools, impacting trading volumes and price stability.
3. Market Monitoring: Keeping an eye on large players like this whale is crucial for other market participants. Their moves can offer insights into potential market shifts and help in making informed investment decisions.
The whale’s strategy leverages the current high DSR for sDAI and the lucrative GHO incentives to maximize profits. However, the sustainability of this strategy depends on the continuity of these favorable conditions. Any reduction in DSR or incentives could prompt the whale to close their position, leading to potential market fluctuations. Thus, monitoring the behavior of such significant players is essential for understanding and anticipating changes in market dynamics.
Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.