Aave intends to create GHO, an over-collateralised stablecoin. Aave DAO, the Aave DeFi protocol’s governing body, voted in favour of a proposal to establish a stablecoin GHO.
The Snapshot vote, ending at 6:00 a.m. EDT today, was approved virtually unanimously by the DAO. The voting page data shows that DAO members holding 501,000 AAVE tokens supported the proposition. This represented 99.99% of all votes cast throughout the three-day election period.
Aave DAO Votes for The Creation of GHO. Image: Aave
After the voting, the next stage will be to actualise the construction of the GHO stablecoin using a new Aave upgrade protocol (AIP). The DAO will manage the stablecoin upon its inception.
Aave users who want to mint GHO may provide any of the platform’s approved crypto tokens as collateral. In addition to serving as collateral, these deposits will receive interest on Aave. On GHO stablecoin loans obtained by borrowers, the protocol will levy interest.
Aave intends for GHO to operate similarly to MakerDAO as an over-collateralised stablecoin (DAI). This indicates that the value of deposited cryptocurrencies will surpass the number of GHO tokens. Aave’s creator, Stani Kulechov, has previously said that the project would seek to promote the adoption of GHO on Ethereum’s Layer 2 by organic means.
By producing a stablecoin, Aave will join MakerDAO and a local group of DeFi stablecoin issuers. According to rumours earlier this month, Curve Finance, another DeFi primitive, may soon be added to this list.