The creators of the lending and borrowing system Aave Companies released their native stablecoin called GHO on the Ethereum Goerli testnet. Here’s what you need to know about the Aave stablecoin GHO.
What is GHO stablecoin?
The stablecoin, pronounced “GO,” is completely decentralized and heavily collateralized. Because minting will be done using assets provided as collateral via the Aave Protocol, it is designed to guarantee that the GHO oracle price is always locked at one-to-one with the US dollar.
Over-collateralization is a method used by the decentralized lending and borrowing platform Aave to guarantee the security of deposited cash. In this arrangement, borrowers are required to put up more collateral than they borrow, serving as insurance for the lender in the event that they are unable to make good on their loan.
How to mint GHO?
The stablecoin GHO is minted through assets supplied as collateral in the Aave Protocol. The stablecoin’s launch will be determined by the approval of the Aave DAO, the governing body of both the Aave Protocol and GHO. Anyone who holds AAVE, the platform’s governance token, will have a say in GHO’s supply, interest rate, and risk parameters. The Aave DAO will also be responsible for approving facilitators that can mint and burn GHO tokens. The stablecoin has been audited by several firms and is currently undergoing a final audit.
Difference between GHO and GHST tokens
As stated earlier, GHO is a stablecoin on the Aave protocol. However, GHST is the Aavegotchi NFT Gaming protocol’s eco-governance token. Owners of GHST tokens have voting rights in the AavegotchiDAO, which regulates the protocol, the company’s main game, Gotchiverse, and Aavegotchi NFTs.
Aave Price Prediction: Will AAVE Price go up?
Although GHO tokens were just announced, AAVE prices seem to have taken a toll. Prices fell from the high of $92 and reached the current price of around $78. This is because the entire crypto market is adjusting. We explained why are cryptos crashing in this article here, and that other one here. That’s why we expect to see AAVE prices continue to drop until Bitcoin prices stabilize and retrace higher.
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