Aave has released its algorithmic stablecoin GHO, which is pegged to the US dollar. The stablecoin has been met with a positive reception, with over $2.19 million worth minted so far.
Several digital assets, including Ethereum and AAVE, support the stablecoin. The stablecoin was introduced on July 16 in a blog post, and there is already a lot of interest in it.
The Aave community is excited about the launch of GHO. In a governance vote, nearly 100% of the participating addresses voted in favor of the new stablecoin.
GHO is a decentralized stablecoin that is backed by transparent reserves. This makes it a more trustworthy option than centralized stablecoins like USDT, which have been criticized for a lack of transparency.
Aave’s GHO stablecoin is a decentralized stablecoin that is built on smart contracts. This indicates that all transactions are open and verifiable on-chain.
GHO’s revenue will be used to strengthen the Aave DAO treasury, and governance of the treasury will be entrusted to AAVE and stkAAVE token holders.
GHO is the latest algorithmic stablecoin to launch on the DeFi platform, following crvUSD from Curve in May.
According to DefiLlama, DAI is the largest algorithmic stablecoin in circulation with a market capitalization of $4.28 billion. The stablecoin is issued by MakerDAO and is backed by Ether.
Although algorithmic stablecoins have increased in popularity, centralised issuers like Tether and Circle continue to dominate the overall stablecoin market.
Tether is the king of the stablecoin hill, with a market share of 65% and $83.7 billion USDT in circulation. Its supply has grown by 27% since the beginning of 2023, as its U.S. treasury collateral has been bringing in a steady stream of revenue.
Circle’s USDC supply has taken a hit, declining by 38% since the beginning of 2023, as regulatory pressure in the United States has mounted.
USDC is the second-largest stablecoin in the market, with DAI coming in third. DAI has $4.3 billion in circulation compared to USDC’s 21% market share and $27.3 billion in circulation.