Crypto.news - Aave has launched its algorithmic stablecoin, GHO, backed by multiple crypto assets, including ethereum (ETH). GHO will be an alternative to DAI, a stablecoin minted by MakerDAO.
Aave’s GHO is live
After more than one year in development, Aave, the world’s second-largest decentralized finance (DeFi) protocol, has launched GHO (pronounced “go”), an overcollateralized decentralized algorithmic stablecoin on Ethereum.
On July 15, Aave said DeFi market participants could mint the GHO stablecoin by depositing supported collateral assets into the Aave Protocol V3 on Ethereum.
Unlike popular stablecoins like tether (USDT), issued by centralized entities, the GHO algorithmic stablecoin will be issued and managed by AaveDAO, a decentralized autonomous organization.
In correspondence with Bloomberg, Stani Kulechov, founder and CEO of Aave, said revenue generated by GHO will be allocated to the project’s community contributors, including security experts, developers, and others.
The Aave team says all GHO transactions will be handled by self-executing smart contracts, with transaction data, reserves, and other key information regarding the stablecoin verifiable on-chain, underscoring the project’s transparency.
Crypto, DeFi, and stablecoins
Despite the transparency offered by decentralized stablecoins, their centralized counterparts still dominate the market. The collapse of UST, a Terra algorithmic stablecoin project last year, proved that the so-called decentralized stablecoins are not immune to the risks of manipulation and de-pegging.
MarkerDAO’s DAI, which managed to recover from a de-peg event in March, is the world’s largest algorithmic stablecoin, with a market cap of $4.27 billion.
At the time of writing, GHO trades at $0.993870 with a total supply of 2,267,933 GHO, according to CoinGecko.
Whether Aave’s GHO stablecoin will gain traction and potentially overtake DAI or USDT remains to be seen.
This article was originally published on Crypto.news
