GHO stablecoin is said to be the native of Aave protocol and will have complete collateral backing and USD pegging.
Community behind the open source liquidity protocol Aave—Aave DAO, has approved GHO. Collateral-backed and native stablecoin for Aave protocol, GHO, was anticipated for quite long. After the fall of Terra networks UST algorithmic stablecoin, different entities came up with their stablecoin plans. For instance, USDD stablecoin of Tron network. Aave protocol’s highly anticipated stablecoin is also expected to fill the void.
On 31st July, Aave officially announced on Twitter that the community had agreed on giving approval for GHO stablecoin. Additionally, it was also noted that voting will be taking place further for GHO genesis parameters. Tweet also mentioned to look out for a governance forum regarding the stablecoin scheduled for next week.
In a blogpost earlier this month, Aave Companies explained GHO stablecoin in detail. The blogpost noted the proposal of Aave companies to the DAO. The proposal was to introduce the native stablecoin of the protocol GHO. This was said to be completely collateral-backed and pegged with USD.
Specifications about the GHO stablecoin were also shared further that included its minting process to its advantages over others. Community support seeking stablecoin, set to be launched on the Aave liquidity protocol, would be allowed to get minted by the users in exchange of their collaterals supply.
The blogpost further provided details on the backing of the stablecoin. It said that the stablecoin would have a variety in terms of its backing of crypto assets that will also be dependent on the choice of users. Interest yielding was also mentioned while borrowers would be eligible to earn interest against their underlying collateral.
The Aave governance will be responsible for making all the GHO related decisions. If GHO gets approved, then it will act as a highly competitive stablecoin while providing more options for users in terms of available stablecoins. This is also expected to let them generate more revenue for the DAO while sending them about 100% of their payments generated out of interest on GHO.
Source: https://www.thecoinrepublic.com/2022/08/01/aave-dao-permitted-native-collateral-backed-stablecoin-gho/