Aave Revealed Technical Details of its Stablecoin GHO  

• The proposal of GHO Stablecoin was approved in the second quarter of 2022.  

Aave Companies is a centralised entity that works as a Watchdog on leading lending Defi protocol. It has released a technical paper on GHO(Upcoming Stablecoin of Aave), including its first security audit results.

The upcoming Stablecoin of Aave Companies GHO is an overcollateralized dollar-backed stablecoin that was proposed in the H2 of 2022, nearly around July.

On 31st July, Aave officially announced on Twitter that the community had agreed to approve GHO stablecoin. Additionally, it was also noted that voting would be taking place further for GHO genesis parameters. The tweet also mentioned looking for a governance forum regarding the stablecoin scheduled for next week. 

Aave is DeFi’s fourth largest protocol, with a total value locked (TVL) of over $5 billion.

Leading security firm Open Zeppelin conducted the audit and found no critical or high-severity bugs in the codebase. Regardless, the firm pointed out two medium-severity bugs in the codebase.    

The Aave governance will be responsible for making all the GHO-related decisions. If GHO gets approved, it will act as a highly competitive stablecoin while providing more options for users regarding available stablecoins. 

This is also expected to let them generate more revenue for the DAO while sending them about 100% of their payments out of interest on GHO. 

GHO Facilitators are the group of people or institutions liable for creating and burning GHO tokens and are selected by the Governance. Each facilitator will have a special strategy for using the GHO token backed by additional collateral. Undoubtedly an unprecedented drop in collateral values ​​could result from a liquidation event.

The Aave V2 market on Ethereum was originally chosen as the first facilitator. Nevertheless, after the latest launch of Aave V3 on Ethereum as a new deployment, the team has decided to use it as the inaugural facilitator of GHO.

The management believes the recent protocol iteration is suitable for GHO, presenting major risk-reducing features such as e-mode, isolation mode, and supply caps. 

Each facilitator will be able to create GHO tokens based on the maximum capacity of their bucket. The maximum number of tokens that a facilitator can create is specified by Aave governance.

The total supply of GHO can be decided by adding up all the facilitators’ buckets. When a User pays back his GHO loan or is liquidated, interest is credited to the Away DAO Treasury.  

AAVE price gave a much-awaited move in the last two trading sessions. After the consecutive falling, the bulls now recover the muscles again. The price sustains over the 20,50 days EMA, signaling the bulls are now in momentum. Moreover, on the chart, the falling wedge pattern breakout implies a boost in the price. The coin is now trading at $82.35 with a gain of 3.51%, showing bullish on the chart.

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

Latest posts by Steve Anderrson (see all)