Aave has launched GHO, its algorithmic dollar-pegged stablecoin on Ethereum in the decentralized finance space.
Aave’s DeFi protocol has released GHO, its algorithmic USD-pegged stablecoin on Ethereum’s mainnet, with $2.19 million worth of GHO minted to date.
Aave revealed the launch of GHO stablecoin through a July 16 blog post, describing it as a “decentralized, over-collateralized” asset. The stablecoin is backed by various digital assets, including Ethereum’s Ether (ETH) and Aave’s AAVE token, which is currently trading at $78.96.
The Aave DAO has successfully launched @GHOAave on the Ethereum Mainnet. Congrats to the Aave community on this historic moment! pic.twitter.com/Br3QGqMU8X
— Aave Labs (@aave) July 15, 2023
GHO’s mainnet launch followed a community governance vote where almost all of the 424 participating addresses voted in favor of the stablecoin.
Unlike centralized stablecoins like Tether’s USDT, which faced criticism due to a perceived lack of transparency regarding their reserves, GHO’s assets are transparent and verifiable. Aave states that the backing assets can be confirmed through on-chain data.
Aave stated that all GHO transactions are executed through self-executing smart contracts, and data related to these transactions is accessible and auditable directly from the blockchain or through various user interfaces.
Furthermore, Aave mentioned that GHO’s revenue will strengthen its DAO treasury, and governance responsibilities will be entrusted to AAVE and stkAAVE token holders.
Total circulating supply of GHO since inception. Source: DeFiLlama
The GHO stablecoin is now accessible to the public, allowing anyone to mint GHO by using the assets they supply as collateral in the Aave Protocol V3 Ethereum market. This ensures that GHO remains overcollateralized by a variety of assets.
GHO’s launch adds to the increasing number of DeFi-native algorithmic stablecoins. Earlier, on May 4, Curve, a DeFi protocol, released its flagship algorithmic stablecoin called crvUSD.
Currently, MakerDAO’s Ethereum-based stablecoin DAI holds the position of the largest algorithmic stablecoin in circulation, with a market capitalization of $4.28 billion, as per DeFiLlama data.
Nevertheless, the centralized issuers like Tether and Circle continue to dominate the total stablecoin market.
Stablecoin dominance by market capitalization. Source: DeFiLlama
Currently, Tether’s USDT and Circle’s USD Coin USDC, both valued at $1.00, make up 87% of the total circulating supply of U.S. dollar-pegged stablecoins.
As of the publication time, GHO is trading slightly below the targeted $1 peg at $0.9927, with a recorded low of $0.9814 on July 16, based on CoinMarketCap price data.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
Join Cryptos Headlines Community
Follow Cryptos Headlines on Google News and Threads App
