In an astounding turn of events, Aave‘s GHO, a digital stablecoin tethered to the United States dollar and fostered on the Ethereum network, amassed a minting worth of $2.5 million within 48 hours of its launch. This decentralized, over collateralized stablecoin, safeguarded by an array of digital assets such as Ethereum’s Ether (ETH) and Aave’s own token (AAVE), came to life following the result of a community governance vote carried out by the Aave DAO.
It’s this governing body of members that will oversee the running of GHO, handling matters raging from its supply, interest rates, and minting limits, as well as the approval and management of facilitators who can create GHO under specific circumstances. Interestingly, the initial vote, while merely incorporating 424 wallets, saw an almost unanimous support for the stablecoin with negligible dissent.
In turn, this newly minted stablecoin was launched onto the Aave V3 online marketplace, with a myriad of cryptocurrencies listed, including AAVE, ETH, USDT, USDC, and DAI now eligible as collateral. This guarantees an assorted array of assets for over-collateralization, which adds significant robustness and dynamism to GHO’s portfolio.
Indeed, following GHO’s debut, Aave’s total locked value ballooned impressively to $5.938 billion – a hearty 16% increase when compared to pre-launch figures. This effectively showcases the initial success of the GHO platform along with an exceptional surge in Aave’s circulating market cap by 52.85% to stand at $1.13 billion.
Moreover, through the Aave Protocol V3 Ethereum market, GHO can be minted by anyone using the assets they supply as collateral. It’s intriguing to note that during launch, Aave V3’s Facilitator has a total minting capacity reaching up to 100 million GHO, of which only a mere 2.5% has been minted so far. However, the power is in the hands of the Aave DAO to expand this cap through a community vote if needed.
Further positives include the fact that deposited collateral continues to accrue yield in the Aave V3 protocol, with the interest given for GHO borrowing going straight to the DAO treasury. Plus, contributors of AAVE to the protocol’s safety module can also get GHO at a discounted rate.
In comparison with centralized stablecoins like Tether’s USDT, GHO sets itself apart with a firm commitment to transparency and verifiability of underlying assets. Thanks to self-executing smart contracts, Aave makes sure that the assets supporting GHO can be audited directly from the blockchain or via different user interfaces, giving credence to the safety and credibility of the new platform.
Source: Cryptonews
