GHO stablecoin will be released following a massive approval by Aave DAO.
The decentralized stablecoin GHO’s development team receives approval from Aave DAO to launch it. Users of Aave will mint the stablecoin using the provided collateral.
The Aave community voted in a snapshot vote that lasted through Sunday and unanimously accepted a governance proposal to launch a crypto-backed stablecoin on the Aave protocol.
Aave Companies, the group behind the Aave protocol, proposed the launch of GHO, a stablecoin that is overcollateralized and pegged to the US dollar, on July 7, 2022.
After careful deliberation by the community, the proposal received 12 no votes and 17 abstentions. Over 500,000 AAVE tokens were committed by community members, who ultimately voted 99.9% in favor of the initiative.
The fact that the Aave V2 on Ethereum will serve as the first GHO facilitator is also a part of the plan that was approved. Aave will be able to act as a facilitator by creating and burning GHO tokens as needed to offer liquidity.
This week, further debates about the launch of the stablecoin will start on the Aave governance forum.
Proposal for GHO Stablecoin
GHO will be a decentralized, overcollateralized stablecoin backed by a “diversified set of crypto-assets” and pegged to the US dollar, according to the initial concept.
By providing the approved collateral in the required collateral ratio, users can create GHO. The user must commit the necessary collateral and pay interest if he chooses to borrow money. The Aave DAO will choose a flexible interest rate for borrowing.
The GHO protocol will burn the supplied GHO when a loan is due, and any accumulated interest on the transaction will be remitted to the Aave DAO Treasury.
The Aave community is fully supporting the initiative, therefore we hope GHO stablecoin will be released soon on the market. Aave also made a suggestion that conversations about pertinent specifications for the stablecoin’s initial iteration should begin.
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When the permission was initially announced on Sunday, the AAVE native token initially increased from $95 to $108 (a 13.7 rise). However, it has now reversed course and is currently trading at around $97, following the general trend of the cryptocurrency market, which has fallen 2.02% over the past 24 hours.
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