Decentralized finance protocol Aave has taken another major step by officially rolling out its decentralized stablecoin GHO, following a massive vote of support from its community. As of now, users can mint GHO by depositing cryptocurrencies as collateral on Aave.
Aave deploys its stablecoin GHO
The decentralized finance protocol Aave formalized the launch of its decentralized stablecoin GHO following a massively favorable vote from his community. As noted in Aave’s press release, GHO (pronounced GO) can be minted by users when they deposit cryptocurrencies as collateral on the protocol.
The Aave DAO has successfully launched @GHOAave on the Ethereum Mainnet. Congratulations to the Aave community on this historic moment! pic.twitter.com/Br3QGqMU8X
— Aave (@AaveAave) July 15, 2023
Like Aave, the GHO stablecoin was designed in a totally decentralized way, which is why its creation, deployment and future are entirely managed by the decentralized autonomous organization (DAO) of the protocol. Thus, any change implemented on the GHO will have to be the subject of a vote within the DAO, which will determine whether such or such a proposal must be accepted, rejected, or even refused.
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The GHO was deployed today on the Aave V3 market with a maximum issue set at 100 million dollars, a ceiling that can be modified later via the DAO system just mentioned. In addition, holders of AAVE tokens will be able to benefit from a 30% discount on the GHO borrowing rate if they decide to deposit their tokens as collateral, ensuring a virtuous circle on the protocol.
“As a decentralized and over-collateralized native asset of Aave, GHO has the potential to become a leading stablecoin and, in the future, an important payment layer for the Internet. »
The GHO will be introduced through “enablers”, entities hand-picked by Aave’s DAO, which will have GHO reserves (called “buckets”). To start, the GHO will be distributed through the “Ethereum V3 Pool” and “FlashMinter Facilitator” facilitators.
As the name suggests, the first is based on the Aave V3 market liquidity pool on Ethereum (ETH). The FlashMinter meanwhile, allows the use of flash loans to provide instant liquidity.
This step forward by Aave demonstrates the interest of DeFi platforms in creating dedicated decentralized stablecoins, Curve having rolled out its own (crvUSD) last May.
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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