It’s GHO time: Aave stablecoin passes community governance vote

In a departure from many popular stablecoins, GHO is a completely decentralized, multi-collateral stablecoin with a fixed price oracle

by Bessie Liu /

July 14, 2023 12:29 pm

Satheesh Sankaran/Shutterstock modified by Blockworks

Decentralized liquidity protocol Aave is primed to launch its native stablecoin GHO on Ethereum mainnet Saturday.

The greenlit launch follows a community governance vote, with a total of 424 addresses participating. Close to 100% of voters were in favor.

In an earlier statement expounding upon GHO’s development, Aave CEO and founder Stani Kulechov said stablecoins play a critical role in the crypto economy.

“Stablecoins have the potential to become the payment layer for Web3 because of their speed without the price volatility that has deterred consumers and merchants from using digital currencies,” the company told Blockworks in a statement this week.

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In a departure from popular stablecoins such as UDSC and USDT, GHO has been designed as a completely decentralized, multi-collateral stablecoin with a fixed price oracle.

Its backing, as such, is completely transparent, with GHO holders able to discern exactly which assets are held in the stable token’s reserves.

Minting GHO

The launch of GHO will introduce facilitators — entities or protocols with the ability to create and destroy the stablecoin.

During GHO’s initial launch, users would be able to mint the stablecoin by supplying collateral into the Aave V3 facilitator pool or through the FlashMinter facilitator.

Aave’s V3 facilitator pool will have an initial borrow rate of 1.5% and a bucket capacity — an upward limit on mints — of 100 million GHO. Aave stakers will be eligible for a discount of 30%.

The AaveDAO treasury will receive any interest accrued from GHO.

Flash minting will also be possible. Flash minting — similar to a flash loan, will enable users to mint GHO and repay in a single transaction.

“The FlashMinter would have a beneficial influence on GHO’s ability to maintain its peg because, amongst other benefits, it enables more efficient arbitrage,” the protocol said in the proposal.

Any entity that hopes to become a facilitator in the future must be vetted by Aave governance and receive its own bucket capacity.

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