In a significant show of support, AaveDAO approved the GHO stablecoin proposal with a vote of 501,000 to just 12 against.
Last weekend, the AaveDAO enthusiastically backed the GHO proposal, indicating strong community support. DeFi The proposal for the new stablecoin was introduced on July 7, igniting a vigorous dialogue about recent issues in the stablecoin market. blog post The discussion among community members ran from July 28 to July 31, demonstrating robust support for the idea. An overwhelming 501,000 tokens were voted in favor while only 12 were opposed. Additionally, there were 17 abstentions. Even though some votes were from larger holders, it was evident that support was widespread—the largest single contributor brought 183,000 tokens to the table, though this alone wasn't adequate for the move to be authorized.
However, the official vote This indicates that the community has reached a consensus, signaling a green light for GHO's development. whales Established in 2017 after a successful ICO that raised $16 million, Aave operates as a decentralized financial market platform where users can lend or borrow a variety of cryptocurrencies for their financial advantage. The platform aims to promote passive income, boasting more than $9 billion in locked liquidity across multiple networks and markets. According to DeFi Llama, Aave ranks as the third-largest protocol of its kind, following Lido and others.
The upcoming GHO stablecoin is set to be over-collateralized and will maintain a peg to the US dollar. This will mark Aave's introduction of GHO as their newest token, following their earlier creations.
What is Aave?
Aave already has a couple of key crypto assets in use: ‘aTokens,’ which allow lenders to earn interest on their deposits, and the native ‘AAVE’ tokens. MakerDAO .
What is GHO?
One of the standout features of the Aave protocol is its ability to enable users to earn interest on their deposits in real-time, as funds are tokenized into Aave interest-bearing tokens (aTokens) that are directly tied to the underlying assets. This allows for interest payments to also be made in aTokens, which can then be converted back into the original asset when users withdraw their funds. Kraken Aave users will have the ability to mint GHO using their collateral from a wide array of supported cryptocurrencies. Those who borrow GHO using crypto assets will continue to accrue interest on the collateral backing the newly minted stablecoin.
The introduction of GHO will provide AaveDAO an opportunity to bolster its treasury and community resources through transaction fees and interest gained from loans made in GHO. Nomics Feedback from discussions around the proposal shed light on significant topics, such as potential issues with DAO-determined interest rates, the necessity of implementing supply caps, the advantages of having a stabilization module, and the importance of thoroughly vetting potential facilitators.
'I want to emphasize that the DAO won't control borrowing interest rates,' stated a contributor, O_expxresearch, within the forum. 'They must be either variable or fixed but ought to reflect market dynamics completely.' This commenter highlighted that pegged currencies cannot maintain free capital flow, independent monetary policies, and stability concurrently. Decrypt said.
'UST's ambition to achieve all three aspects led to major market imbalances,' according to their account. Aave Companies has indicated that interest rate policies will adapt to external market conditions. burned from the protocol,” Decrypt also said.
Community Feedback
The DAO’s formal Snapshot 'Many advocates of Aave quickly pointed out the inherent flaws of UST's uncollateralized design, which ultimately resulted in its loss of peg,'
'unlike algorithmic stablecoins, which have faced scrutiny after recent market shifts, crypto-backed stablecoins are collateral assets supported by a diverse array of other digital assets,' they added. While GHO will be minted by users supplying suitable collateral, when they repay borrowed amounts, the GHO protocol will destroy that user's GHO.
The community has officially sanctioned the progression of GHO. The next phase involves voting on the fundamental parameters for GHO, so stay tuned for the proposal that will be presented in the governance forum next week.
Both the DAO and the crypto community Following the favorable vote for GHO, the price of AAVE tokens jumped briefly from approximately $95 to $108, stabilizing in the three-digit range for a moment before returning to $95, according to market data.
The introduction of the GHO proposal indicates that last weekend's voting was merely a precursor to securing the community's approval and stimulating further discussions. This voting event was also instrumental in clearing Aave's V2 Market as GHO's inaugural facilitator, with V3 on the horizon. Cointelegraph wrote.
'The upcoming step involves voting on the foundational parameters of GHO,' noted Aave representatives. 'Keep an eye out for the major proposal on the governance forum.' the collapse of Terra The community will also play a role in deciding whether to assist the company in covering the costs and efforts associated with launching the stablecoin, potentially involving social over-collateralization. Blockworks We could add another GHO pun here, but there will surely be an abundance of those in the coming weeks. Stay engaged!
What’s Next
Justin Sun has announced a massive two-billion-dollar investment to maintain the peg of USDD amid concerns of collapse. CoinMarketCap at the time of writing.
The UK government is planning to launch its own NFT as part of an initiative to establish itself as a worldwide leader in cryptoasset technology. Ethereum Please bear in mind that the information provided here is not intended to be legal, tax, investment, financial advice, or serve any other advisory purpose. Only invest what you're prepared to lose, and if in doubt, seek independent financial guidance. For further insights, we recommend consulting the terms and conditions along with help and support provided by the issuer or advertiser. MetaversePost aims for accurate and objective reporting, but market conditions can shift unexpectedly.
Vittoria Benzine, a Brooklyn-based writer focused on contemporary art and personal essays, delves into the human context, counterculture, and chaos magic in her work. Her contributions can be found in Maxim, Hyperallergic, Brooklyn Magazine, among others. tweeted Blum has marked its one-year anniversary with acclaim, receiving awards for 'Best GameFi App' and 'Best Trading App' at the Blockchain Forum 2025.
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