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DeFi giant Aave ecosystem will now have its own native decentralized, collateral-backed stablecoin GHO as the community approved the proposal. On the first day itself, the Aave community confirms their support for the introduction of GHO stablecoin as the majority votes in favor of it.
Aave Community Votes in Majority for the GHO
Aave Companies, the centralized authority behind the Aave protocol, has proposed the introduction of GHO decentralized, collateral-backed stablecoin, which will be pegged to USD.
The proposal “Greenlight for GHO” is open for voting from July 28-31. If the DAO approves the proposal, GHO will be launched on the Aave Protocol, allowing users to mint GHO against a set of supplied collaterals.
GHO stablecoin can be minted by users against several crypto assets, which are yet to be finalized. Borrowers of GHO will continue to earn interest on supplied collaterals, similar to borrow transactions on the Aave protocol.
Moreover, 100% of interest payments on GHO borrows will provide benefits for the community via the AaveDAO. Also, the starting interest rate and discount rate will be proposed in the next few weeks.
However, if the community doesn’t agree with the proposal, another proposal could be in the discussion.
Until now, the community seems to fully support the proposal as the majority votes in favor of it. The proposal has received 99.96% votes in favor, while 0.04% votes to abstain from participation in the proposal. Moreover, the community seems to be excited about the stablecoin as nobody voted against the proposal yet.
Interestingly, the votes in favor of the proposal have almost 27k AAVE, and 25k AAVE has been from developer aavechain.eth.
The community had given engaging feedback on the GHO proposal. Some include DAO-set interest rates, supply caps, and the value of peg stability module.
IMF Concerns Over Another Selloff Led by Stablecoins
International Monetary Fund’s (IMF) director of monetary and capital markets Tobias Adrian has expressed concerns over an upcoming stablecoins-led crypto winter. He believes the crypto selloff isn’t over yet, stablecoins not backed by cash and treasuries are likely to take crypto to another downfall.
Today, Solana-based stablecoin Nirvana (NIRV) loses its peg and dropped 91% after suffering a flash loan attack. NIRV is a stablecoin by DeFi income farming protocol Nirvana Finance.
The success of DeFi lending protocol Aave’s GHO stablecoin will depend on community support. If there isn’t any support the stablecoin could fail like NIRV.