Aave Protocol launches stablecoin GHO on Ethereum mainnet, $2M minted

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Decentralized finance (DeFi) protocol Aave has launched its algorithmic United States-dollar pegged stablecoin GHO on the Ethereum mainnet, with $2.19 million price of GHO minted thus far.

Aave introduced the launch of the brand new stablecoin in a July 16 weblog put up, describing the brand new stablecoin GHO as a “decentralized, over-collateralized” asset. The stablecoin is backed by a “multitude” of digital property together with Ethereum’s native foreign money Ether (ETH) and Aave’s native token AAVE (AAVE).

The launch of GHO on mainnet got here after a group governance vote, which noticed almost 100% of the 424 collaborating addresses vote in favor of the brand new stablecoin.

In contrast to centralized stablecoins equivalent to Tether’s USDT (USDT), which have drawn some criticism for an obvious lack of transparency round its reserves — the property backing GHO are clear and verifiable and may be confirmed by on-chain knowledge, in line with Aave.

“All transactions are carried out by way of self-executing good contracts, and all knowledge concerning GHO transactions is offered and auditable straight from the blockchain or through quite a few consumer interfaces,” Aave wrote.

Moreover, Aave mentioned GHO’s income would additional bolster its DAO treasury, with governance being entrusted to AAVE and stkAAVE token holders.

Complete circulating provide of GHO since inception. Supply: DeFiLlama

The GHO stablecoin is at present out there to the general public:

“Anybody can mint GHO utilizing the property they provide into the Aave Protocol V3 Ethereum market as collateral, guaranteeing that GHO is overcollateralized by a large number of property.”

Associated: Circle CEO spells doom situation for US greenback in warning to Congress

The launch of GHO marks one other addition to the rising ranks of DeFi-native algorithmic stablecoins. On Could 4, DeFi protocol Curve launched its flagship algorithmic stablecoin crvUSD.

On the time of publication, MakerDAO’s Ethereum-based stablecoin DAI, is the most important algorithmic stablecoin in circulation, commanding a $4.28 billion market capitalization in line with data from DeFiLlama.

Nevertheless, the entire stablecoin market stays dominated by centralized issuers together with Tether and Circle.

Stablecoin dominance by market capitalization. Supply: DeFiLlama

At present, Tether’s USDT and Circle’s USD Coin (USDC) account for 87% of the entire circulating provide of all U.S.-dollar pegged stablecoins.

On the time of publication, GHO is buying and selling barely under the specified $1 peg at $0.9927 and has fallen as little as $0.9814 on July 16, in line with worth data from CoinMarketCap. 

Cointelegraph contacted Aave for remark however has but to obtain a right away response. 

Journal: Unstablecoins: Depegging, financial institution runs and different dangers loom