Aave Companies, the company behind the decentralized finance (DeFi) protocol Aave suggestion Create a native decentralized USD pegs table coin GHO on July 7th.
The proposal is controversial and must pass the governance vote that is held.
Once the community accepts the proposal, Aave users will be able to create a GHO by providing collateral. According to the proposal, GHO tokens will be burned when the user pays or clears the debt.
The proposed stablecoin is similar to the MakerDAO protocol DAI, which is the most popular stablecoin on the Ethereum network.
The proposal states that GHO is over-collateralized and supported by “a diverse set of crypto assets selected at the discretion of the user”. Your assets continue to act as collateral and at the same time generate interest.
Founder of Aave Stani Klechov wrote in a Twitter thread:
While GHO is protected by the assets of the Ethereum market, GHO’s main vision is to pursue organic adoption via L2 to solve real payment opportunities on the internet and on the ground.
— Stani.lens (🌿, 👻) (@StaniKulechov) July 7, 2022
According to the proposal, Aave DAO will determine the interest rate for borrowing GHO at a stable interest rate that may be adjusted based on market conditions.
According to the proposal, the first implementation of GHO will include a discount strategy, which will allow Aave safety module participants (stkAAVE holders) to borrow GHO at a discounted interest rate. According to the proposal, Aave DAO will determine the discount rate.
GHO casting will make a considerable income in the form of Aave DAO fees. In addition, the interest paid to the borrowed GHO will be sent directly to Aave DAO. addition:
“This revenue growth can be used to innovate the ecosystem, support contributors, strengthen finances during market downturns, or for other DAO-determined purposes.”
According to Kulechov, GHO development has been completed and the first audit is scheduled for July 11.
