What is GHO?

The GHO stablecoin (pronounced “go”) is a decentralised, overcollateralised asset native to the Aave Protocol, designed to maintain a stable value pegged to the U.S. Dollar. Overcollateralised means that the collateral supplied is greater than the value of the stablecoins issued. This provides a buffer in case the value of the collateral decreases, helping to maintain the peg of the stablecoin. Currently, GHO can be borrowed against any collateral assets available in the Aave V3 Ethereum market.

How is GHO different from other stablecoins?

Unlike other stablecoins, GHO is created directly within the Aave ecosystem, allowing users to mint GHO by supplying collateral to the protocol. This structure safeguards that GHO is fully backed by more than the value of the collateral, promoting stability and resilience in volatile market conditions. The decentralised nature of GHO is a significant feature, as it is governed by the Aave community through Aave Governance, which controls key aspects like interest rates and collateral requirements.

What makes GHO particularly unique is it's native integration with the Aave Protocol. As a native stablecoin, GHO leverages Aave’s existing infrastructure, including its overcollateralization model and decentralised governance. Interest paid by GHO minters go directly to the Aave DAO treasury, supporting the protocol’s sustainability and governance. This model differentiates GHO from centralized stablecoins, as it is designed to be transparent, secure, and community-driven, with all decisions being made through Aave's decentralised governance processes.