Aave Protocol Unveils GHO Stablecoin on Ethereum Mainnet, $2M in Initial Minting

Aave, a decentralized finance (DeFi) protocol, has introduced its new algorithmic stablecoin, GHO, on the Ethereum mainnet. As of now, GHO has been minted with a total value of $2.19 million.

In a blog post on July 16, Aave announced the launch of GHO, describing it as a decentralized and over-collateralized stablecoin. The stablecoin is backed by a diverse range of digital assets, including Ethereum’s native currency, Ether, and Aave’s own token, AAVE.

The introduction of GHO on the mainnet follows a community governance vote, in which almost 100% of the 424 participating addresses voted in favor of the stablecoin.

Unlike certain centralized stablecoins that have faced criticism for their lack of transparency regarding reserves, Aave ensures that the assets supporting GHO are transparent, verifiable, and can be audited through on-chain data. Aave emphasized that all transactions are executed through self-executing smart contracts, and data pertaining to GHO transactions is accessible and auditable directly from the blockchain or through various user interfaces.

Furthermore, Aave stated that the revenue generated from GHO will contribute to its decentralized autonomous organization (DAO) treasury, with governance entrusted to AAVE and stkAAVE token holders.

The GHO stablecoin is now available to the public, allowing anyone to mint GHO by utilizing assets supplied to the Aave Protocol V3 Ethereum market as collateral, ensuring over-collateralization by multiple assets.

The launch of GHO adds to the growing landscape of DeFi-native algorithmic stablecoins. On May 4, DeFi protocol Curve introduced its flagship algorithmic stablecoin, crvUSD. Currently, MakerDAO’s Ethereum-based stablecoin, DAI, remains the largest algorithmic stablecoin in circulation, with a market capitalization of $4.28 billion, according to DefiLlama data.

However, centralized issuers such as Tether and Circle continue to dominate the stablecoin market. Tether’s USDT and Circle’s USD Coin account for 87% of the total circulating supply of all U.S. dollar-pegged stablecoins.

At the time of writing, GHO is trading slightly below its desired $1 peg, at $0.9927, and has reached a low of $0.9814 on July 16, according to data from CoinMarketCap.

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