GHO

Overview

GHO is a US dollar-pegged stablecoin launched on Ethereum mainnet in July 2023 after approval by Aave DAO, the governance body of the decentralized lending protocol Aave. It is overcollateralized and minted directly by users against collateral they have supplied to the Aave protocol, with that collateral continuing to earn interest while it backs the borrowed GHO.

Unlike typical market-driven lending rates, GHO's borrow rate is set by Aave DAO governance votes, and the interest paid by borrowers accrues to the Aave DAO treasury. Minting is restricted to approved entities known as Facilitators, each operating within a governance-assigned issuance cap, and GHO has expanded beyond Ethereum to networks such as Arbitrum and Base. Stablecoins carry risks including collateral volatility, smart contract vulnerabilities, and deviation from the peg.