Aave submits proposal to launch GHO stablecoin on Ethereum
Aave has submitted a proposal to launch the GHO stablecoin on the Ethereum mainnet, marking a significant milestone for the DeFi protocol. Following rigorous testing and governance procedures, Aave aims to establish GHO as its native token.
Chinese crypto reporter Colin Wu drew public attention to the recent development in a tweet on June 7.
The decision to launch GHO stems from extensive community deliberation and voting conducted by the Aave DAO. Once GHO is officially released, Aave V3 users can leverage their Ethereum collateral to obtain GHO loans. Notably, all interest payments associated with GHO loans will be channeled toward the DAO treasury, thereby augmenting the revenue streams for the Aave DAO.
To ensure the protocol’s stability and mitigate potential losses, the DAO treasury collects fees from diverse sources and utilizes them to bolster security via the Aave Safety Module. Additionally, the treasury allocates funds for the development and innovation of the protocol through the Aave Grants DAO, a grant program led by the community.
The introduction of GHO will empower the DAO to exert governance control over the interest rates attributed to GHO, thus upholding the principle of decentralization within its financial framework. Upon launch, GHO will feature two Facilitators: the Aave V3 Ethereum Pool and the FlashMinter.
The launch of GHO is contingent upon the final approval of the Aave DAO, which will be obtained through an Aave Request for Improvement (AIP) after receiving feedback from the community via this Aave Request for Comment (ARFC). Should the proposal be approved, GHO will be fully operational on the Ethereum Mainnet.
In the wake of GHO’s launch, the Aave community intends to present a multi-chain strategy, urging the deployment of GHO on various alternative networks such as Polygon, Avalanche, Arbitrum, Optimism, and more. This strategic expansion will enhance GHO’s reach and utility across diverse ecosystems and markets.
