The decentralized finance protocol (DeFi) Aave will indeed issue its own stablecoin following an overwhelmingly positive vote by its community on the forum. With over 99% of the votes cast, the implementation of the GHO is now in the hands of the Aave Decentralized Autonomous Organization (DAO).
GHO voted for by the AAVE community
Aave’s proposal to create its own stablecoin, presented earlier this month by the teams in charge of the project, seems to have found great interest among its community.
Following a 3-day vote that started on July 28 and ended yesterday, Sunday July 31, the creation of the token named “GHO” has been validated with a very favorable majority with 99.99% of “Yes”.
As indicated in Aave’s tweet, a new proposal should appear later this week in order to determine, in coordination with the community’s opinion, how the token’s launch will be structured.
The GHO will be implemented through the Aave Improvement Protocol (AIP), with the Aave Decentralized Autonomous Organization (DAO) now responsible for the stablecoin launch.
The community’s decision momentarily boosted the price of the AAVE token, which was able to see a rise of around 17% within an hour of the announcement, rising from $93 to just over $109.
What will the GHO model be?
Defined as an “over-collateralized” stablecoin, GHO will be minted (mint) from the assets deposited by users on the platform as collateral. At the same time, these assets will continue to generate returns for their depositors.
In order to ensure this over-collateralization, a user wishing to obtain GHOs will have to deposit a higher value of cryptocurrencies compared to the amount of GHOs they wish to receive. Moreover, GHOs will be automatically burned if a user of the protocol is liquidated.
For a fee, the loan of GHO tokens will directly benefit the AAVE community since the profits will be paid to the community treasury. The latter, focused on the growth of the protocol, now reaches 208 million dollars.
According to the proposal in the governance forum, a fixed interest rate will be applied to the GHO and it will also be added to a variety of cash pools so that it can be used by Aave users as part of their investment strategies.
This is the second major announcement this year for the Aave protocol, which previously launched its Lens social network in May. The decentralized finance platform, meanwhile, has over $9.7 billion locked up.
