Cryptocurrency NewsAave deploys DAI stablecoin competitor on Ethereum

Aave deploys DAI stablecoin competitor on Ethereum

Aave has introduced GHO, an algorithmic stablecoin called GHO, which is backed by various cryptocurrencies, including ethereum (ETH). GHO aims to provide an alternative to MakerDAO’s stablecoin, DAI. Aave, the second-largest decentralized finance (DeFi) protocol, recently launched GHO after more than a year of development.

To mint GHO, users can deposit supported collateral assets into Aave Protocol V3 on Ethereum. Unlike centralized stablecoins like tether (USDT), GHO is issued and managed by AaveDAO, a decentralized autonomous organization. The generated revenue from GHO will be distributed among Aave’s community contributors, such as security experts and developers, according to Stani Kulechov, Aave’s founder and CEO.

Aave emphasizes transparency by conducting all GHO transactions through self-executing smart contracts. The stablecoin’s transaction data, reserves, and other crucial information can be verified on-chain.

While decentralized stablecoins offer transparency, centralized stablecoins still dominate the market. The collapse of UST, a Terra algorithmic stablecoin project, highlighted the risks of manipulation and de-pegging even for decentralized stablecoins. Despite this, MakerDAO’s DAI remains the largest algorithmic stablecoin, with a market cap of $4.27 billion, even after experiencing a de-peg event in March.

As of now, GHO is trading at $0.993870, with a total supply of 2,267,933 GHO, according to CoinGecko. It remains to be seen whether Aave’s GHO stablecoin will gain traction and potentially surpass DAI or USDT in popularity.


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