The information about GHO (GHO) is gathered from various websites and posts on X. GHO is a decentralized, over-collateralized stablecoin launched on the Ethereum blockchain as an ERC-20 token. It is native to the Aave protocol, a prominent decentralized finance (DeFi) lending and borrowing platform governed by the Aave DAO through community proposals and votes. Introduced to enhance borrowing capabilities within the Aave ecosystem, GHO was first deployed on the Ethereum Goerli Testnet in February 2023 and later launched on the Ethereum Mainnet in July 2023, following extensive community discussion and approval.

GHO operates through a mint-and-burn mechanism managed by facilitators—entities such as DeFi protocols approved by Aave governance. These facilitators can mint GHO tokens when users deposit digital assets as collateral, allowing borrowers to access GHO while continuing to earn yield on their underlying assets. When the borrowed GHO is repaid, the tokens are burned, reducing the circulating supply, and the collateral is returned to the user. This process ensures GHO remains fully backed by collateral on Ethereum. The stablecoin is designed to maintain stability, with its supply, interest rates, and risk parameters determined by the Aave DAO.

A unique feature of GHO is its integration with Chainlink’s Cross-Chain Interoperability Protocol (CCIP), enabling native cross-chain transfers. Since GHO is exclusively issued on Ethereum, cross-chain versions are canonical wrapped tokens, fully collateralized by GHO locked on Ethereum via CCIP. This facilitates interoperability across blockchain networks. Additionally, GHO offers borrowers a fixed interest rate, initially set at 1.5% APY, with a discount available for those staking AAVE tokens, potentially reducing the rate further. The token’s codebase was audited by firms like Open Zeppelin, SigmaPrime, ABDK, and Certora, and a Bug Bounty program was established to enhance security.

GHO’s development reflects Aave’s focus on decentralization, with efforts to keep it as community-driven as possible. It has been positioned as a tool to improve borrow rates and provide a stable medium of exchange within DeFi. Beyond Ethereum, discussions on X suggest its potential use as a gas token in related ecosystems like the Lens Chain stack, incorporating zero-knowledge proofs and horizontal scaling with technologies like ZKsync. GHO stands out as a stablecoin tailored for DeFi utility, emphasizing accessibility and governance by its community of users.