Top Aave Contributor Discusses GHO Minting Cap
According to Marc Zeller, the founder of the Aavechan initiative, users and traders are no longer able to create new GHO stablecoins by minting. The high demand for GHO has driven the token to its minting cap, meaning that new coins cannot be created for the foreseeable future. However, interested parties can still purchase the stablecoin on secondary markets where GHO trades slightly below its $1 peg. It is available on Balancer, Maverick, and Uniswap. Zeller mentioned that a governance proposal would be introduced to repeg GHO to the U.S. dollar and allow users to mint new tokens, but it’s unclear when this proposal will be published and up for a vote in Aave’s DAO.
Aave’s GHO Stablecoin Strategy
GHO was introduced in June 2023 as part of Aave DAO’s strategy to bootstrap liquidity, bolster utility, and compete with Maker’s stablecoin DAI. The token allows Aave v3 users to leverage their Ethereum collateral to secure GHO loans. Additionally, Aave DAO retained rights over GHO interest rates, reinforcing decentralization within the protocol’s community. Plans are also underway to expand GHO’s availability to other blockchain networks like Arbitrum, Avalanche, and Polygon.
Hot Take: Aave Community Votes for Security Updates
In other Aave-related news, the protocol’s community voted in favor of security updates aimed at addressing vulnerabilities discovered in select markets on Nov. 4.
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