GHO is a decentralized multi-collateral stablecoin that is fully backed, transparent and native to the Aave Protocol.
Borrowers and suppliers can mint GHO using assets they have supplied into V3 as collateral on Ethereum markets, while continuing to earn interests on their underlying assets.
The GHO pool will function differently from existing assets but to borrow it will work similarly as other available assets on the different markets in the protocol.
- 1.Supply Collateral
- 2.Borrow GHO
- 3.Repay GHO and Accrued Interest (real-time)
- 4.Repaid interest will be redirected to the DAO, rather than an asset supplier, contributing to the DAO treasury
Assets that are available in the Aave Protocol can be used to back GHO. Initially, the Ethereum V3 pool will be the first facilitator to launch because of V3’s extensive risk-mitigation features, including e-mode, isolation mode, and supply caps.
The Aave DAO will manage the supply of GHO, the interest and determine risk parameters.
By the repaid interests being redirected to the DAO, rather than the asset suppliers, these repaid interests contribute to the DAO treasury.
Unlike many stablecoins, the oracle price for GHO will be fixed. Decentralized stablecoins such as GHO are transparent and cannot be changed. Interest rates are defined by the Aave DAO and repaid interest is redirected to the DAO instead of the asset suppliers. Discounts are available to borrowers staking AAVE in the Safety Module.
Users that have staked AAVE tokens in the Safety Module (stkAave) are eligible for a discount on GHO.
For each stkAave there will be a discount on the borrowing rate for 100 GHO. The discount model is interchangeable and can be redesigned and replaced if needed by The Aave DAO.
Currently only stkAAVE.
GHO can be flashloaned, but is implemented differently than flashloans are today.
- Flashmint: docs.gho.xyz/concepts/fundamental-concepts/flashmint