Aave Labs Proposes Integration of GHO Stablecoin Across Multiple Blockchains
Aave Labs has put forward a new governance proposal to integrate the GHO stablecoin across multiple blockchain networks. The goal of this initiative is to enhance GHO liquidity, accessibility, and interoperability while maintaining security and stability.
Utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP)
Aave Labs specifically suggests utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to achieve this integration. Currently, GHO has limited use as it can only be accessed through minting on the Ethereum mainnet. Aave Labs believes that making GHO a multichain asset will allow users to interact across different networks using GHO.
“We believe the future of GHO is to become a multichain asset where users can interact across various networks using GHO.”
– Aave Labs
The Proposal Details
If approved by the Aave community, each selected network will host a “canonical version of GHO” along with a facilitator responsible for minting and burning GHO tokens. These facilitators will manage facilitator buckets and facilitate the onboarding of GHO liquidity from Ethereum. The total liquidity across chains will be limited by the amount of GHO tokens locked on Ethereum. However, no specific timeframe for implementation is provided in the proposal.
GHO’s Struggle to Regain its Peg
Currently, GHO has been struggling to maintain its peg to $1 since its launch in July 2023. GHO is a decentralized multi-collateral stablecoin primarily backed by Ethereum (ETH), ETH-staking derivatives, and Wrapped Bitcoin (WBTC). At present, GHO is priced below $0.98 according to CoinGecko data.
Hot Take: Aave Labs Aims to Boost GHO’s Liquidity and Accessibility
Aave Labs has proposed integrating the GHO stablecoin across multiple blockchains to enhance its liquidity, accessibility, and interoperability. By utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP), Aave Labs aims to make GHO a multichain asset, allowing users to interact with it across different networks. The proposal outlines that each selected network will host a canonical version of GHO alongside a facilitator responsible for minting and burning GHO tokens. However, the proposal does not specify a timeline for implementation. This initiative comes as GHO has struggled to maintain its peg to $1 since its launch. With this proposal, Aave Labs seeks to address these challenges and increase the utility of GHO in the DeFi ecosystem.
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