New Stablecoin ‘GHO’ Proposal Approved by AAVE DAO

New Stablecoin ‘GHO’ Proposal Approved by AAVE DAO
  • An overwhelming majority of 1,793 people voted in favor of the measure.
  • From the 28th of July 2022 until the 31st of July 2022, a voting window was open.

The AAVE DAO approves AAVE’s plan to create the algorithmic stablecoin GHO. Aave Companies, the company behind AAVE, presented a request on July 7 for its decentralized stablecoin. From the 28th of July 2022 until the 31st of July 2022, a voting window was open for this proposal. An overwhelming majority of 1,793 people voted in favor of the measure, approving it by a margin of 99.99 percent.

The DAO will oversee the construction of the stablecoin now that the proposal has been accepted.  Stablecoins may be backed by a number of cryptocurrency assets, according to AAVE. Using the assets they’ve pledged as collateral, AAVE users may produce stablecoins. In addition to serving as a safety net, the assets will provide income while in possession.

Collateral Option Through Aave Protocol

The Ethereum mainnet will host GHO, a decentralized stablecoin. To borrow GHO, users are required to provide collateral in a certain ratio. User’s GHO will be burned when they settle a borrowed position. GHO borrowers will now be able to receive interest on their collateral on a regular basis after the proposal was accepted. Decentralization and over-collateralization are the main features of GHO. There are a variety of collateral options available through the Aave protocol to support it.

In addition to the crypto community, the GHO team expects to see a rise in GHO use. GHO will have low transaction costs on L2s, according to the team. Stablecoins have been viewed with skepticism by cryptocurrency enthusiasts since the demise of TerraUST. AAVE now joins the growing list of platforms mulling the idea of a DeFi stablecoin.

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A devoted content writer having 3 years of crypto trading experience. Loves cooking and swimming. Stays up to date with the latest developments on blockchain technology.