Aave Protocol Launches Decentralized Stablecoin on Ethereum Mainnet

Aave, a decentralized finance (DeFi) protocol, has launched its algorithmic stablecoin GHO on the Ethereum mainnet

The stablecoin, backed by various digital assets including Ether and AAVE, is described as decentralized and over-collateralized

The launch of GHO followed a community governance vote, with an overwhelming majority in favor of the stablecoin

This ensures transparency and verifiability of the assets backing GHO through on-chain data

GHO's revenue will contribute to Aave's DAO treasury, with governance entrusted to AAVE and stkAAVE token holders

GHO is available to the public and can be minted by using assets supplied to the Aave Protocol V3 Ethereum market as collateral

Aave's GHO joins the ranks of DeFi-native algorithmic stablecoins, with Curve's crvUSD being another notable example

MakerDAO's Ethereum-based stablecoin DAI currently holds the largest market capitalization in this category

However, the stablecoin market is still largely dominated by centralized issuers such as Tether (USDT) and Circle's USD Coin (USDC)

These centralized stablecoins account for 87% of the total circulating supply of USD-pegged stablecoins