cointelegraph.com
Decentralized finance (DeFi) protocol Aave has launched its algorithmic United States-dollar pegged stablecoin $GHO on the Ethereum mainnet, with $2.19 million worth of $GHO minted so far.
Aave announced the launch of the new stablecoin in a July 16 blog post, describing the new stablecoin $GHO as a “decentralized, over-collateralized” asset. The stablecoin is backed by a “multitude” of digital assets including Ethereum’s native currency Ether (ETH) and Aave’s native token $AAVE ($AAVE).
Let's $GHO! Congrats to the @AaveAave community on the Mainnet Launch. https://t.co/vI7JbMLYb4
— $GHO (@GHOAave) July 15, 2023
The launch of $GHO on mainnet came after a community governance vote, which saw nearly 100% of the 424 participating addresses vote in favor of the new stablecoin.
Unlike centralized stablecoins such as Tether’s $USDT ($USDT), which have drawn some criticism for an apparent lack of transparency around its reserves — the assets backing $GHO are transparent and verifiable and can be confirmed by on-chain data, according to Aave.
“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,” Aave wrote.
Additionally, Aave said $GHO’s revenue would further bolster its DAO treasury, with governance being entrusted to $AAVE and stkAAVE token holders.
The $GHO stablecoin is currently available 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 launch of $GHO marks another addition to the growing ranks of DeFi-native algorithmic stablecoins. On May 4, DeFi protocol Curve launched its flagship algorithmic stablecoin crvUSD.
At the time of publication, MakerDAO’s Ethereum-based stablecoin DAI, is the largest algorithmic stablecoin in circulation, commanding a $4.28 billion market capitalization according to data from DeFiLlama.
However, the total stablecoin market remains dominated by centralized issuers including Tether and Circle.
At current, Tether’s $USDT and Circle’s USD Coin (USDC) account for 87% of the total circulating supply of all U.S.-dollar pegged stablecoins.
At the time of publication, $GHO is trading slightly below the desired $1 peg at $0.9927 and has fallen as low as $0.9814 on July 16, according to price data from CoinMarketCap.
Cointelegraph contacted Aave for comment but has yet to receive an immediate response.