In a move that is sure to stir up the blockchain landscape, Aave DAO community members are poised to decide on deploying the highly anticipated gho (GHO) stablecoin on the Ethereum blockchain. Aave, a platform that enables users to earn returns on their pledged tokens, is proposing to introduce GHO via “facilitators”. This would allow users of Aave’s Version 3 (V3) to mint GHO against token holdings supplied to the platform.
GHO, which amusingly means ghost in Finnish, creates an interesting shakeup in the decentralized finance world; an apparent spectral leap from the typical lending transactions on Aave. With GHO, users would continue to accrue interest on the supplied collateral, similar to other Aave lending transactions.
That being said, the ramifications of the proposal carry substantial weight. If given the green light, GHO’s introduction could propel stablecoin borrowing on the Aave protocol to competitive new heights. This advancement could potentially spawn extra revenue for the Aave DAO. The scheme envisions the DAO treasury receiving the entirety of the interest payments from GHO borrows.
Gho’s presence in the blockchain scene isn’t unheard of, as it has been running on Ethereum’s Goerli testnet since February. Thus far, it has operated without stumbling upon significant bugs. This ghosts’ smooth operation might help sway the voting crowd.
In early June, the developer Aave Companies proposed two facilitators—V3 Ethereum Facilitator and FlashMinter Facilitator—in a governance post. The former aims to allow gho lending against collateral deposits, while the latter offers a twist on the usual, allowing loans to be issued against zero collateral.
Facilitators, whether protocols or entities, possess the capacity to generate and burn GHO tokens up to a certain limit. This mechanism enables depositors to borrow GHO against their collateral placed in Aave V3’s Ethereum mainnet pool.
While the initiative appears promising, one cannot sweep under the rug the question of whether it would be making borrowing on the Aave Protocol more competitive or merely complicating and adding another layer to the lending transaction processes. As with any looming change, the prospect of the GHO stablecoin comes rimmed with a balance of opportunity and uncertainty. Treating cryptosphere as a curious observer, we shall patiently await the result of the impending vote.
Source: Coindesk
