Over the weekend, Aave DAO successfully launched the GHO stablecoin on the Ethereum mainnet.
The dollar-pegged stablecoin was proposed in July 2022 as a way to allow users to mint GHO by providing crypto collateral to Aave v3 on a system similar to MakerDAO’s DAI.
The Aave DAO has been successfully launched @GHOAave on the Ethereum mainnet. Congratulations to the Aave community for this historic moment! pic.twitter.com/Br3QGqMU8X
— Aave (@AaveAave) July 15, 2023
$2.2 million GHO minted
The team said that GHO was slightly different from other stablecoins because the interest refunded is redirected to the Aave DAO treasury, adding:
“This supports the sustainability of the protocol and the continued development of new features.”
He added that AAVE token stakers would get a discount for minting GHO. According to the official website, 2.2 million have already been minted on Ethereum. However, at the time of writing, the stablecoin was trading just below par at $0.992, according to CoinGecko.
Aave explained that coining GHO requires “Enablers” who are approved and governed by Aave Governance. “Governance-approved facilitators will be able to mint up to a specific amount of GHO agreed upon by the DAO,” she added.
Additionally, the multi-collateral token can be minted with any collateral in the Aave v3 protocol.
The native Aave token of the same name was trading flat on the day at $77.51, but gained 10% over the past week.
GHO is entering an already crowded stablecoin market, with one player commanding the lion’s share.
Stablecoin Ecosystem Perspective
The stablecoin market is currently worth around $128 billion, which is about 10% of the total crypto market capitalization.
Tether is the dominant player with a 65% market share and $83.7 billion USDT in circulation. Its supply has grown 27% since the start of 2023 as its US Treasury guarantee has generated steady income.
Tether is printing!
Do you know what that means! 👀#Bitcoin #USDT pic.twitter.com/cmoVKHsDHP
— Crypto Rover (@rovercrc) July 16, 2023
By contrast, rival stablecoin issuer Circle has seen its USDC supply dwindle by 38% over the same period as regulatory pressure mounts in the United States.
USDC has a 21% market share, with $27.3 billion outstanding. The third largest stablecoin on the market is DAI, at $4.3 billion.
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