The majority of the decentralized non-custodial market protocol community Aave DAO has voted in favor of creating a stablecoin GHO, which will be backed by a portfolio of other cryptocurrencies as collateral.
Aave DAO is a non-custodial, decentralized marketplace system that allows users to lend and borrow Bitcoin (BTC).
By allocating digital assets to a smart contract, users can generate passive income while also supplying liquidity to the BTC market.
According to Away’s website, it is open source and claims to have liquidity of $9.8 billion.
99.9% of voters supported the proposal
Backed by Aave companies, 99.9% of voters voted in favor of the proposal and promised half a million AAVE in support of the proposal to establish a GHO.
Users who wish to mint GHO must first deposit a cryptocurrency that is accepted by Away.
Interest will still be paid on the underlying collateral used to hedge the stablecoin for GHO borrowers against digital assets.
Additionally, GHO loans will be charged interest through the lending protocol, along with payments made to Aave DAO.
Users must allocate deposits in excess of the amount of GHO they receive to shield the GHO, allowing loans to be more collateralized. When users redeem or expire the borrowing position, the GHO will be removed from the lending protocol.
Implementation of GHO will take time
Despite the approval of the proposal, the GHO will take some time to be implemented as it will be deployed through the Improvement Protocol (AIP). The Aave DAO will be in charge of overseeing the distribution of the stablecoin once its creation is approved.
Voting took place over three days, and upon approval of the proposal, the price of AAVE, the lending platform’s native coin, rose from $95.40 to about $108.
Aave is currently trading at $95.85, down almost 10% over the past 24 hours.
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