In a notable milestone for the DeFi protocol, Aave has officially submitted a proposal to introduce the GHO stablecoin on the Ethereum mainnet. With a strong focus on thorough testing and governance protocols, Aave envisions GHO as its native token.
On June 7, Chinese crypto reporter Colin Wu brought public attention to the recent development through a tweet, highlighting its significance in the crypto community.
Aave released the ARFC proposal on the launch of the native stablecoin GHO on the Ethereum mainnet on the governance forum. Users will be able to use collateral to mint GHO, while the DAO treasury will receive GHO loan interest as additional income. https://t.co/kM832v0rkN
— Wu Blockchain (@WuBlockchain) June 7, 2023
The launch of GHO is the result of thorough community deliberation and voting within the Aave DAO. With its official release, users of Aave V3 will have the opportunity to utilize their Ethereum collateral to acquire GHO loans. Importantly, all interest payments generated from GHO loans will contribute to the DAO treasury, bolstering the revenue streams for the Aave DAO.
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In order to maintain protocol stability and minimize potential losses, the DAO treasury of Aave collects fees from various channels and employs them to enhance security through the Aave Safety Module. Furthermore, the treasury allocates funds towards protocol development and innovation through the Aave Grants DAO, a community-led grant program.
With the introduction of GHO, the DAO will gain governance authority over the interest rates associated with the stablecoin, reinforcing the principles of decentralization within its financial framework. Upon its launch, GHO will be facilitated by two entities: the Aave V3 Ethereum Pool and the FlashMinter.
The launch of GHO is subject to the ultimate approval of the Aave DAO, which will be sought through an Aave Request for Improvement (AIP) subsequent to receiving community feedback via the Aave Request for Comment (ARFC) process. If the proposal is granted approval, GHO will be fully functional on the Ethereum Mainnet.
Following the launch of GHO, the Aave community plans to propose a comprehensive multi-chain strategy, advocating for the deployment of GHO on various alternative networks, including Polygon, Avalanche, Arbitrum, Optimism, and others. This strategic expansion aims to broaden the reach and usability of GHO across different ecosystems and markets.
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Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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