Aave, a lending protocol, has entered the world of decentralized digital currency by launching its decentralized GHO stablecoin on the Ethereum mainnet. This decision was made after Aave’s decentralized autonomous organization approved a governance vote earlier this week.

The GHO stablecoin was first introduced on the Goerli testnet in February 2023 and is now accessible to users on Aave version 3 on Ethereum.

It’s becoming a common practice for DeFi platforms to introduce their own stablecoins, and this is in line with that trend.

In May, Curve Finance, which is one of the biggest decentralized exchanges by trading volume, also released its own overcollateralized stablecoin.

How is GHO working?

The GHO stablecoin will be supported by cryptocurrency assets such as ether (ETH) and issued by the Aave protocol through an overcollateralized loan. This means that users must deposit cryptocurrency assets as collateral that exceeds the amount they plan to borrow.

The Ethereum Facilitator smart contract system is utilized by the GHO stablecoin. This system allows users to deposit collateral and borrow GHO, with all collateral being stored in the Ethereum mainnet pool.

At launch, ‘facilitators’ – entities approved by the DAO – will be able to issue GHO. The Aave V3 Ethereum platform has been given permission to be the first facilitator to issue GHO.

It is also important to note the fact that a crucial feature of the GHO stablecoin is that it will redirect all interest accrued from loans directly to the Aave DAO treasury.

“The Aave DAO will vote and govern decisions like acceptable collateral assets for GHO as well as risk parameters,” notes the online publication The Block.

Bitcoin latest news

Robert Kiyosaki, who has sold millions of copies of his book, suggests that Bitcoin (BTC) and precious metals are the way to go amidst increasing national debt and financial inequality.

He expresses sadness about the current state of America and shares this sentiment with his 2.4 million Twitter followers.

Given his outlook on the US economy, he says he will continue to invest in “real assets” which include Bitcoin, silver and gold.

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