The cryptocurrency sector is constantly changing, and the emergence of new technologies and trends is constantly changing the landscape. Among these innovations, decentralised policies seem to be attracting the attention of many major players in decentralised finance (challenge). Despite past setbacks, such as the historical collapse of the UST algorithmic version of the defunct Terra Classic network, the Aave protocol has chosen to embark on this adventure with the official introduction of its GHO stablecoin.
Presentation of the Stablecoin GHO d’Aave
The Aave Challenge lending platform finally launched its GHO stablecoin on the Ethereum blockchain network, after announcing its creation in July 2022. The GHO Stable Token joins a booming stablecoins market, dominated mainly by centralized tokens such as Tether and USD Coin. Unlike its competitors, GHO stability will be overguaranteed to prevent it from losing its parity with the USD. However, this mechanism will still have to prove itself in the markets, because at the time of writing this article, the GHO price is $0.9897.
Rapid success for GHO
Following the approval of its proposal, Aave officially launched GHO on the main network of the blockchain Ethereum over a weekend. The overguaranteed dollar stablecoin had previously been issued on the Ethereum testnet and has, at the time of this article, a market cap of 2.25 million dollars, according to data provided by Defillama.
Governance and mechanisms of Stablecoin GHO
Governed by the DAO (Autonomous Decentralized Organization) of the Challenge Protocol, GHO introduces the concept of decentralized and over-guaranteed stability. It is supported by a multitude of digital assets, including the native currency of Ethereum Ether and the native token of Aave AAVE. The governance of GHO is therefore decentralised, which ensures greater transparency and increases user confidence in its operation.
The advantages of GHR over other stablecoins
- Decentralization: In contrast to centralised institutions such as Tether and USD Coin, GHO is managed in a decentralised manner by the Aave DAO, thus guaranteeing greater transparency and a distribution of power among token holders.
- Over-collateralized: GHO is supported by several digital assets, including ETH and AAVE, allowing it to maintain parity with the USD even in the event of significant market fluctuations.
- Flexibility: Thanks to its decentralised nature, GHO offers greater flexibility and adaptability in the face of different market conditions, in contrast to centralised stability, which may be subject to regulatory or institutional constraints.
Future prospects for decentralised care
The launch of GHO by Aave marks an important step in popularizing decentralised settlements. If this new generation of cryptocurrencies can overcome the challenges of stability and user confidence, it could well play a key role in the widespread adoption of blockchain and challenge technologies.
A potential upheaval in the housing sector
With the emergence of projects such as the Aave GHO, decentralised settlements have the potential to compete with centralized actors on their own ground and thus radically change the situation in the cryptocurrency sector. By offering transparency, flexibility and over-guarantee, these newcomers could appeal to an ever-growing public and help democratise access to decentralized finance.
By launching GHO, Aave is taking a bold step in the world of decentralised settlements. Only the future will tell us whether this project will convince users and establish itself as a major player in the cryptocurrency market. For the time being, it is clear that interest in these new forms of stability is growing, and their development could well mark a crucial stage in the evolution of the cryptocurrency sector.
