DeFi protocol Aave proposes creation of stablecoin called GHO

Quick Take

  • DeFi protocol Aave has proposed that it should create a new stablecoin.
  • The stablecoin would be overcollateralized with yield-generating assets.

Aave Companies, the entity behind DeFi protocol Aave, has proposed to Aave's governance forum that a new stablecoin called GHO should be created.

Currently the proposal is up for discussion and it would need to pass a governance vote to be implemented.

The stablecoin would be overcollateralized and similar to dai, the most popular decentralized stablecoin in the Ethereum ecosystem.

Aave users would be able to mint the stablecoin by using assets that they have supplied to Aave as collateral. These assets would continue to generate yield while also being used as collateral.

"While GHO would be secured by the assets on the Ethereum market, the main vision for GHO is to pursue organic adoption via L2s [layer 2s] to solve real life payment opportunities across the internet and on-ground," said Aave founder Stani Kulechov on Twitter.

Kulechov added that the Aave DAO would benefit by receiving the interest payments from anyone who borrows the stablecoin. He noted that the stablecoin's development has been completed and has an audit scheduled for July 11.


© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Tim is the Editor-In-Chief of The Block. He writes about the evolution of crypto technology and the people who are at the forefront of it. He provided exclusive, source-based insights into the launches of the Bitcoin and Ethereum ETFs, crypto sales by the FTX Estate and the Trump-linked World Liberty Financial project. Prior to joining The Block, Tim was a news editor at Decrypt. He earned a bachelor's degree in philosophy from the University of York and studied news journalism at Press Association Training. Follow him on X @Timccopeland.

WHO WE ARE

The Block is a news provider that strives to be the first and final word on digital assets news, research, and data.

+ Follow us on Google News
Connect with the block on