Aave Launches GHO Stablecoin on Ethereum Goerli Testnet

• The system mandates that borrowers put up greater assets than the loan’s face value.
• The GHO source has been released on Github for developers to review and test.

Aave has announced the launch of their native stablecoin, GHO, on the Ethereum Goerli testnet. Stablecoin, whose name is pronounced “GO,” is completely decentralized and entirely collateralized. The Aave Protocol’s system of minting via collateral guarantees that the oracle price of GHO will be pegged to the dollar at all times thanks to the nature of the protocol.

Over-collateralization is used by the Aave platform, a decentralized lending and borrowing platform, to protect user deposits. As a protection for the lender, this system mandates that borrowers put up greater assets than the loan’s face value. As a result, stablecoins may be issued with a low cost of capital. While yet being backed by an extensive portfolio of cryptocurrencies contributed by Aave users.

Founder and CEO of Aave, Stani Kulechov stated:

“With the support and management of the Aave community, GHO’s decentralized stablecoin can power a payment layer that can easily, securely, and efficiently transfer value across DeFi and TradFi ecosystems.”

Ethereum V3 as First Facilitator

Before its scheduled debut on the Ethereum mainnet, the GHO source has been released on Github for developers to review and test.

The Aave DAO is the governing body over the Aave Protocol and GHO, therefore its consent is required for the launch to occur. Given that the Aave DAO will be in charge of the stablecoin, all owners of the platform’s governance token (AAVE) will have a say in setting the supply, interest rate, and risk criteria for GHO.

Facilitators who may mint and burn GHO tokens will need to be approved by the Aave DAO. Moreover, Aave suggested using the Ethereum V3 market as the first facilitator because to its robust safety features.