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- 1 Aave discloses its plan to launch a new stablecoin called GHO and pronounced as Go.
- 2 The stablecoin will be Ethereum-based and is approved by DAO.
- 3 Aave is the second largest DeFi platform with a TVL of $6.76 Billion, says data from DeFiLlama.
GHO, which will be launched by Aave on the Ethereum mainnet, will allow borrowers to earn with their deposits locked in Aave and still borrow stablecoin. But this proposal is at its first level, that is feedback level and has not been launched yet.
GHO to Get DAO’s Approval
Aave, the giant in Decentralized Finance (DeFi) disclosed its plans to introduce a new overcollateralized stablecoin called GHO. It is pronounced as ‘Go.’ The stablecoin is launched under the DAO’s (Decentralized Autonomous Organization) approval.
Aave companies made this announcement via Twitter, tweeting about the GHO on Thursday. Aave is the centralized entity that supports the Aave protocol. According to all the information shared and the announcement made on Thursday, it is clear that GHO would be an Ethereum-based stablecoin. It will be a decentralized stablecoin whose value will directly depend on the US dollar. It can be collateralized with other assets as well if the user wishes.
To get GHO, users need to mint it and to mint it they need to deposit some collateral. While the decision and the list of the approved collateral are yet to be finalized, many details are still needed.
Per the announcement, if the community supports the move, then GHO can be launched on the Aave protocol. It will allow users to mint punch in their collaterals and mint GHO. It was also said that this whole system will be backed up by crypto assets which will be chosen by the users.
It is highlighted that the complete interest payments received by GHO miners will be directly shifted to the AaveDAO treasury. Generally, this payment is transferred to the standard reserve factor that is collected when users borrow other assets.
Aave companies claimed that they could borrow and mint GHO at a discounted rate also. This will benefit the holders of staked Aave tokens. The team states that some recommended starting interest and discount rates could be implemented if the community supports them. If the community votes positively for bringing the resources of the protocol into action, then it will allow users to mint GHO. They added that if everything falls into place, an audit will take place.
Stani Kulechov, the founder of Aave Companies says that the team is planning big and has a vision bigger than it seems.
Aave is essentially an automated DeFi protocol. It allows users to lend and borrow digital assets and prevent them from going through the procedure of approval from a centralized intermediary. Aave has a Total Value Locked (TVL) of $6.76 Billion making it the second-largest DeFi platform.
Its ecosystem is completely based on Ethereum and it also supports multiple layer 2s including Arbitrum, Polygon and Optimism.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
