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The on-chain activity for AAVE token reached a year-high level that correlates with the most recent 114% price bounce on the market. The main reason behind the increased on-chain activity and great performance on the market is the release of the GHO stablecoin.
What is GHO, and how will it work?
According to the most recent proposal, the AAVE network agreed to release the native blockchain-based stablecoin GHO, which is yet to be implemented through the Aave Improvement Proposal. Users will be able to earn interest by borrowing GHO against other crypto assets.
On-chain activity for the $AAVE token is in an up-trend
— IntoTheBlock (@intotheblock) August 1, 2022
Daily active addresses recently reached a yearly high as Aave moves forward with its GHO stablecoin
The $AAVE token is up 114% from the recent bottom pic.twitter.com/mg23ylVORg
The protocol itself is going to charge interest on loans taken in GHO and send payments back to the Aave DAO. Reportedly, AAVE is planning on pegging GHO to the U.S. dollar and the bracket of cryptocurrencies deposited on the platform. The DAO behind the stablecoin will determine the native interest rate of the stablecoin.
The native stablecoin for AAVE is a long-awaited feature for the network as it will act as a bridge between other protocols and AAVE.
AAVE market performance
According to the daily chart of the asset, AAVE is currently moving in the local uptrend, showing more than a 90% price increase in the last 24 hours. The GHO release was only part of the current rally's foundation, as it initially started with the recovery of the cryptocurrency market.
For now, AAVE is moving far above the 50-day moving average and could be aiming at the 200-day moving average as its next target, located at approximately the $130 price level. The trading volume remains at a relatively high level, which shows that the recovery rally might still be intact for a few more days or even weeks.