Aave DAO, the Aave DeFi protocol’s governing body, in voting that ended today has voted in favor of a proposal by Aave Companies to the DAO for the introduction of GHO.
In the three-day voting process, the GHO stablecoin proposal was supported by 99.99% of all the voters (501,000 AAVE token holders).
The GHO will be administered by Aave governance through an AIP and 100% of interest payments on GHO borrows will also be sent to the AaveDAO. However, it will be up to the AaveDAO to decide if it will support the Aave Companies for the cost and work on the GHO.
Minting the GHO stablecoin on Aave
Following the community approval, GHO stablecoin will be launched on the Aave Protocol. Aave protocol users will be able to mint the GHO stablecoin against a wide range of crypto-assets. In addition, those who borrow GHO will also continue to earn interest on their underlying supplied collateral.
Aave users have the liberty of depositing any of the cryptocurrencies accepted on the platform as collateral for minting the GHO stablecoin. Besides the deposits serving as collateral for minting GHO stablecoin, the deposits will also generate yield for the Aave Borrowers who take out GHO stablecoin loans.
Just like the MakerDAO’s DAI, Aave wants the GHO to be an over-collateralized stablecoin meaning more GHO tokens will be created compared to the value of the deposited cryptocurrencies.
Earlier on, the founder of Aave, Stani Kulechov, stated that they would try promoting organic acceptance of the GHOstablecoin on Layer 2 of Ethereum.
By approving the proposal to launch the GHO, Aave has basically set itself on a path to join the likes of MakerDAO and other DeFi stablecoin issuers in launching stablecoins. Another protocol that has expressed the intention of launching a stablecoin is Curve Finance.