A new algorithmic dollar-pegged stablecoin has entered an Ethereum mainnet.
Aave Protocol, the decentralized finance (DeFi) landscape leader, has successfully launched GHO, an algorithmic stablecoin tied to the US dollar, on the Ethereum mainnet.
According to the announcement shared on July 16th, GHO is a "decentralized, over-collateralized" asset. An array of digital assets back this stablecoin, including Ether (ETH) and AAVE (AAVE).
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The commencement of GHO's presence on the mainnet is the result of an almost unanimous community governance vote. The 424 addresses showed nearly 100% favorability towards this new stablecoin introduction.
In the realm of centralized stablecoins like Tether's USDT, criticism over transparency surrounding reserves is commonplace. Aave's GHO stands apart in this regard. According to the DeFi protocol, the digital assets backing GHO are not just transparent but verifiable as well.
All transactions are performed through self-executing smart contracts, and all data regarding GHO transactions is available and auditable directly from the blockchain or via numerous user interfaces.
Additionally, the DAO treasury of Aave stands to be enhanced by the revenue generated by GHO. Furthermore, the governance of GHO will be managed by the holders of AAVE and stkAAVE tokens.
The newly minted GHO stablecoin is accessible to the public:
Anyone can mint GHO using the assets they supply into the Aave Protocol V3 Ethereum market as collateral, ensuring that GHO is overcollateralized by a multitude of assets.
The advent of GHO is a significant milestone in the burgeoning field of DeFi-native algorithmic stablecoins. Previously, DeFi protocol Curve introduced its own flagship algorithmic stablecoin, crvUSD, on May 4th.
At the time of writing, GHO is slightly undervalued against its intended $1 peg, trading at $0.9899.
The launch of GHO was yet another testament to the continual growth and diversification of the stablecoin market, with DeFi-native algorithmic stablecoins playing an increasingly important role.
