Aave DAO community members will begin voting on whether to deploy the much-awaited gho (GHO) U.S. dollar-pegged stablecoin on the Ethereum blockchain later today, an Aave Improvement Proposal (AIP) shows.
Aave is a lending and borrowing platform that allows users to earn yields on their pledged tokens. Gho can be minted by users against a diversified set of crypto assets. GHO holders will continue to earn interest on the supplied collateral, just as in other lending transactions on Aave, which means ghost in Finnish.
The proposal seeks to introduce GHO through so-called "facilitators," allowing users of Aave version 3 (V3) to mint GHO against token holdings supplied to the platform.
"If approved, the introduction of GHO would make stablecoin borrowing on the Aave Protocol more competitive and generate additional revenue for the Aave DAO by providing to the DAO treasury 100% of the interest payments made on GHO borrows," the proposal states.
Gho has been available on the Ethereum blockchain’s Goerli testnet since February, where it has functioned without encountering any major bugs.
These facilitators, which can be protocols or entities, have the ability to generate and burn GHO tokens up to a certain limit, enabling depositors to borrow GHO against their collateral deposited in Aave V3's Ethereum mainnet pool.
After launch, Aave will allow users to mint GHO tokens against their supplied collaterals. GHO would be backed by a basket of cryptocurrencies chosen at the users’ discretion, while borrowers would continue earning interest on their underlying collateral.
UPDATE (July 11, 11:29 UTC): Adds dollar peg in first paragraph.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish, a cryptocurrency exchange, which in turn is owned by Block.one, a firm with interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets including bitcoin and EOS. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.