In a recent tweet, Aave DAO unveiled that the highly anticipated AIP to deploy GHO on the Ethereum Mainnet is now live.
This proposal, backed by extensive community discussion and multiple phases of the Aave DAO governance process, aims to revolutionize borrowing on the Aave Protocol by introducing GHO with two initial facilitators: the Aave V3 Ethereum Facilitator and the FlashMinter Facilitator.
After undergoing thorough testing on Ethereum’s Goerli Testnet, GHO is ready to make its debut on Ethereum Mainnet pending approval from the Aave DAO. Upon approval, users of Aave V3 on Ethereum will have the ability to mint GHO against their collateral, marking an exciting new chapter for the Aave ecosystem and the Aave DAO.
The introduction of GHO is expected to enhance the competitiveness of stablecoin borrowing on the Aave Protocol and generate additional revenue for the Aave DAO. All interest payments made on GHO borrows will be directed to the DAO treasury, further strengthening the ecosystem.
One of the key features introduced with GHO is the concept of Facilitators. These facilitators, such as protocols or entities, have the ability to generate and burn GHO tokens up to a specific bucket size. The proposal combines two previously approved facilitators, the Aave V3 Ethereum Pool and the FlashMinter, to kickstart the launch of GHO.
The Aave V3 Ethereum Pool Facilitator allows depositors to borrow GHO against their collateral deposited in the V3 Ethereum Mainnet Pool. After extensive community discussion and voting, the initial parameters for GHO’s launch with the Aave V3 Ethereum Pool Facilitator have been determined. These parameters include a borrow rate of 1.5%, a bucket capacity of 100M GHO, and a 30% stkAAVE discount rate.
The FlashMinter Facilitator, also approved by the community, enables users to FlashMint GHO and repay in a single transaction, enhancing GHO’s ability to maintain its peg and facilitating more efficient arbitrage. The FlashMinter Facilitator’s initial bucket capacity will be set at 2,000,000 GHO, with no fee paid to the facilitator.
Once approved, the deployment of GHO’s ERC20 smart contract will be transferred to the Aave DAO, and GHO will be listed as a borrowable asset on the Aave Protocol. The Aave V3 Ethereum Pool and FlashMinter will be enrolled as the initial facilitators of GHO, allowing users to benefit from this groundbreaking stablecoin.
