Aave, a major player in the decentralized finance (DeFi) protocol space, has deployed its native stablecoin GHO on Ethereum’s Goerli testnet. GHO, pronounced as “go,” is available for developers and potential adopters to access its codebase and test it before its release to the Ethereum blockchain. The mainnet start of GHO is subject to community discussion and approval.
Aave is a lending and borrowing platform managed by a decentralized autonomous organization (Aave DAO) through proposals and community votes. The platform allows users to take out crypto loans or earn yields on their tokens using smart contracts, without third-party oversight. Stablecoins, like GHO, are a type of cryptocurrency whose value is backed by an outside asset and aims to keep its price linked to a currency, predominantly the U.S. dollar. The asset class has become the backbone of the crypto ecosystem and has grown to a total market capitalization of $136 billion.
However, GHO will face stiff competition as several other DeFi protocols are also issuing or crafting their own native stablecoin to attract users at a time when crypto lending is slowing down. Currently, Maker’s DAI is the largest decentralized stablecoin with a circulation of $5 billion, while Curve is inching toward launching its crvUSD stablecoin. Despite this, Aave’s position within DeFi with $7 billion worth of digital assets pledged on the platform may give GHO a head start.
According to Dustin Teander, analyst at crypto intelligence firm Messari, GHO could soon become a top decentralized stablecoin, following DAI. However, given the current low demand for debt in DeFi, it could take some time to see significant expansion.
Read more:
- MakerDAO, The DeFi Oldest Project Has Surpassed $1 Billion For The First Time
- Advantage, 10 Billion Times Faster Processing Speeds Than Google’s Quantum Computer
- MakerDAO Unveils New Lending Platform Spark Protocol To Rival Aave In The DeFi Space