Aave DAO Agrees to Launch a Collateral-Backed Stable Coin Called GHO – Bitcoin News

On Sunday, non-custodian market protocol Aave announced that the Aave DAO has approved a new stablecoin for the ecosystem called “GHO.” Aave companies have proposed the stablecoin during the first week of July and the collateral-backed stablecoin will be pegged to the value of the US dollar.

A new collateral-backed stablecoin set to be launched by Aave companies after Aave DAO votes on configuration parameters

avi explained On Sunday, the Decentralized Independent Organization (DAO) Aave approved a proposal to create a stable digital currency called “GHO.” “The community gave the go-ahead for GHO,” Aave’s official Twitter account Hinge. “The next step is to vote on the criteria for GHO’s genesis, look for a proposal next week in the governance forum.”

GHO . Introduction Blog postPublished on July 7, 2022, it says that the stablecoin will be “backed by a variety of crypto-assets that are chosen at the discretion of users, while borrowers continue to reap benefits on their underlying collateral.” The governance proposal was approved by a large majority of Aave DAO voters, with over 99% of those voting in favor of launching the GHO.

Aave DAO agrees to launch a collateral-backed stablecoin called GHO

Governance proposal Approval shot GHO says it will “provide benefits to the community via Aave DAO by sending 100% of interest payments on GHO loans to the DAO” and GHO “will be managed by Aave governance.” The stablecoin Aave will join the stablecoin economy, which is currently valued at $153 billion. rope (USDT) Driving a stablecoin package Dollar coin (USDC) followed behind USDTin terms of total market value.

GHO will also join stable crypto assets that are taking advantage of sideways assets and some of them are taking advantage of the over-collateralization method. The Makerdao stablecoin DAI is over-secured and Tron’s USDD is over-secured, which means there is no more collateral needed to cover the support of the stablecoin in times of extreme market volatility.

The Aave Companies blog post on the subject states that “as a decentralized stablecoin on the Ethereum mainnet, the GHO will be created by users (or borrowers).” The blog post also adds:

In contrast, when the user pays off a metaphor (or gets filtered), the GHO protocol burns that user’s GHO. All interest payments accrued by mintage will be transferred from the GHO directly to the Aave DAO treasury; Instead of the standard reserve factor that is collected when users borrow other assets.

Aave companies say the community is deeply involved in the WHO’s governance proposal

Aave also has a native token that ranks 45 out of over 13,000 crypto assets today. The market value of digital assets is around $1.46 billion and aave (AAVE) It has increased by 84.7% over the past month. The open source decentralized lending protocol is the third largest decentralized finance (defi) protocol by total closed value. data From defillama.com notes that Aave had $6.59 billion closed on July 31. In mid-May, Aave launched a Web3 platform, based on social media smart contracts called Lens Protocol. The Lens platform contains more than 50 applications built on top of the Polygon Network (MATIC).

Regarding the GHO stablecoin, Aave Companies said that the community is “very involved in GHO’s proposal, providing incredibly helpful and informative feedback.” Aave detailed some of the things the community mentioned that the team will focus on which include interest rate weaknesses identified by the DAO, supply caps, the peg stabilization module, and “the need to properly screen potential facilitators.” For now, the community will have to participate in voting on the parameters of the stablecoin’s origination before the cryptocurrency is released.

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What do you think of the upcoming Aave Stablecoin project called GHO? Tell us what you think about it in the comments section below.

Jimmy Redman

Jamie Redman is the head of news at Bitcoin.com News and a technology financial journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.

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