Aave Debuts a New Stablecoin, GHO, on Ethereum: Details
- DeFi protocol Aave has announced a new stablecoin called GHO on the Ethereum mainnet.
- The stablecoin is backed by a “multitude” of digital assets, including Ether and AAVE.
- Over $2.19 million worth of GHO has been minted so far, as per the official confirmation.
- A voting process saw 100% of the 424 participating addresses vote in favor of the new stablecoin.
Decentralized Finance (DeFi), a decentralized lending system that allows users to lend, borrow, and earn interest on crypto assets, has officially debuted its new stablecoin called GHO on the Ethereum mainnet, and so far, over $2.19 million worth of GHO has been minted. It is crucial to note that the stablecoin industry remains in the regulatory crosshairs following the collapse of the Terra ecosystem last year.
In a July 16 blog post, Aave described the new stablecoin GHO as a “decentralized, over-collateralized” asset. It is crucial to note that the stablecoin is backed by a “multitude” of digital assets, including Ethereum’s native currency, Ether (ETH), and Aave’s native token, AAVE. This launch of the stablecoin came after a community governance vote.
“What sets GHO apart is its commitment to the broader Aave community. The repaid interest on GHO is redirected to the Aave DAO treasury. This supports the sustainability of the protocol and the ongoing development of new features,” said the DeFi protocol.
Additionally, the voting process saw 100% of the 424 participating addresses vote in favor of the new stablecoin. While stablecoins like Tether (USDT) have been criticized for their centralized nature and lack of transparency, the reserve assets of the Aave stablecoin can be viewed on-chain publicly.
Aave believes that the revenue brought in by the stablecoin will further improve the DeFi protocol’s treasury, and the governance will be entrusted to AAVE and stkAAVE token holders. As per the platform, “anyone can mint GHO using the assets they supply into the Aave Protocol V3 Ethereum market as collateral, ensuring that GHO is overcollateralized by a multitude of assets.”
“All transactions are performed through self-executing smart contracts, and all data regarding GHO transactions is available and auditable directly from the blockchain or via numerous user interfaces,” Aave stated.
It seems that the GHO stablecoin will rival DAI. As per an earlier report from BitcoinWisdom, the protocol partnered with Pocket Network, a decentralized Web3 infrastructure provider, to provide greater scalability for developers. Pocket’s RPC (remote procedure call) provides scalable and cost-effective access to the Aave ecosystem.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
