Aave launches algorithmic stablecoin GHO on Ethereum mainnet. Aave announced the launch of the new stablecoin GHO on July 16, describing the new stablecoin GHO as a “decentralized and over-collateralized” asset.
Stablecoin GHOis backed by a variety of digital assets including Ether and Aave's native token and it has already minted $2.19 million worth.
Build with GHO 👇 https://t.co/hpHeSUggc5— GHO (@GHOAave) July 16, 2023
GHO focuses to enable a people-powered financial ecosystem that is accessible to all and benefits everyone. Aave Protocol and GHO allow people around the world to have equal access to the same financial tools that are based on transparent and decentralized technology.
Aave DAO completely governs GHO. They together set the rules and policies that govern GHO. Proposal was made by community members as they submitted a proposal to the DAO, which was discussed openly among the community over some time, and was followed by a vote. Voting was in favor of the launch of GHO on mainnet as early as 100% of the 424 participating addresses vote in favor of the new stablecoin.
The Aave DAO will govern GHO which includes the permitted supply of GHO, setting and adjusting the interest rate and minting caps, determining the risk parameters, and approving and governing Facilitators who can mint GHO with predetermined conditions set by the DAO.
Any user can mint GHO through the assets they supply into the Aave Protocol V3 Ethereum market as collateral, ensuring that GHO is overcollateralized by a multitude of assets. A unique feature of GHO is that the collateral deposited into the Aave V3 protocol is productive and continues to earn yield, reducing the user’s cost of borrowing GHO.
Also, GHO can be minted against all the assets that are available as collateral on the Aave V3 market on Ethereum. Ensuring that GHO is multi-collateral, allows users to mint GHO with any composition of assets they supply to the protocol.
GHO will direct the interest paid on borrows of GHO towards the Aave DAO Treasury as GHO is an Aave Protocol native stablecoin. Users who stake AAVE in the Aave Safety Module, to provide the protocol with a backstop, can mint GHO at a discounted rate.
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