Aave DAO Floats Proposal To Launch Stablecoin GHO On Ethereum
July 11, 2023
![Naga](https://en.ethereumworldnews.com/wp-content/uploads/2022/12/cropped-IMG-6187-1-50x50.jpg"></p><ul><li>Aave V3 users will be able to mint GHO tokens on Ethereum’s mainnet if the proposal is approved by the community.</li><li>The proposal also suggested using staked Aave coins as a way to cut down GHO borrowing costs and incentivize users to mint the stablecoin.</li><li>GHO developers rigorously tested the stablecoin on Ethereum’s Goerlie testnet since February and did not encounter any major bugs with the product.</li></ul><p>The Aave DAO community will soon vote on a proposal aimed at launching the GHO stablecoin on Ethereum’s mainnet after months of testing on Goerli, a popular testnet on Ethereum.</p><div class=)
If approved, users would be able to mint GHO tokens against their collateral directly on Ethereum’s main chain. GHO’s interest rate will be changeable through Aave DAO governance votes.
Proposed by Aave Companies, an active contributor to the DeFi lender, the plan hopes to generate additional revenue for the project’s DAO. The proposal also would bootstrap competition among stablecoin borrowers on the lender’s platform, per the AIP.
If approved, the introduction of GHO would make stablecoin borrowing on the Aave Protocol more competitive and generate additional revenue for the Aave DAO by providing to the DAO treasury 100% of the interest payments made on GHO borrows.
Voting on the proposal opens later today at 22:02 UTC +01:00 and ends 14 Jul 2023, 14:02 UTC +01:00.
GHO Minting Via Aave Facilitators, Aave DAO Plans
The proposal plans to introduce GHO minting on Ethereum through facilitators – protocols or entities that are able to burn and mint GHO coins. “This proposal combined two previously approved Facilitators (the Aave V3 Ethereum Pool and the FlashMinter)”, the proposal reads.
This means that users have two options for minting GHO tokens. They can either deposit collateral in the V3 Ethereum Mainnet Pool and borrow GHO through Aave V3 Ethereum Pool or lash mint GHO tokens without any collateral using the FlashMinter Facilitator. The latter option requires that users repay the loan in a single transaction.
This AIP also proposes slashing the cost of borrowing GHO by using a mechanism built on Staked Aave (stkAAVE).
In other related news, the DAO is also voting to increase staking revenue by converting unproductive ETH from its treasury into wrapped staked ETH and rocket pool ETH.
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