DeFi Protocol AAVE DAO has approved AAVE’s proposition for the development of the algorithmic stablecoin GHO on July 31. On July 7, Aave Enterprises, the company behind AAVE, posted an application for its decentralised stablecoin.
JUST IN: Aave DAO has approved a proposal to create an algorithmic stablecoin, $GHO.
— Watcher.Guru (@WatcherGuru) July 31, 2022
The voting period for the proposition started on July 28, 2022, and closed on July 31, 2022. The proposal was approved with nearly 99.99% expressing support for the plan out of 1,793 total votes cast. After the acceptance of the proposal, the DAO is going to be in charge of overseeing the development of the stablecoin. DAO participants with more than 501k AAVE supported the proposition.
AAVE users may pick from a range of digital assets to support the stablecoin, as per AAVE. AAVE users can produce stablecoins by pledging assets as security. Even when retained as security, the crypto assets may generate yields.
GHO will function as a decentralised stablecoin accessible on Ethereum’s network. Users must supply security in a specified ratio to generate GHO in order to obtain it. The procedure will destroy a user’s GHO whenever a user pays back a borrowed slot.
GHO gets support from the AAVE network
GHO borrowers would be entitled to continue interest on the security given after the plan has been authorised.
GHO would be decentralised and heavily collateralized. It’s going to be supported by various types of collateral that will be available via the Aave network. The company expects GHO to gain popularity within as well as outside the crypto industry. According to the team, GHO will also keep lower operation fees on L2s. Ever since TerraUST collapsed, crypto fans have been cautious about stablecoins. AAVE unites with other sites in developing plans to launch a DeFi stablecoin.