Aave’s Stani Kulechov: What Makes Our GHO Stablecoin Different

Aave co-founder Stani Kulechov is more optimist than ever that the $5 billion DeFi lending protocol’s upcoming stablecoin GHO (pronounced “go” in the project’s mascot ghost) will solve real-world payments question.

“I think it’s a big deal because just a few months ago, I was visiting Buenos Aires, Argentina, and stablecoins are actually used to store value and trade,” he said at Decrypt’s latest hub Hua said. GM Podcast“For example, Argentina’s national currency is almost 100% inflationary, which means that whatever you earn as a consumer today, a year from now, you own half of that value — half of your purchasing power.”

But he added that most Argentines use centralized exchanges. Kulechov believes that Aave’s GHO will help attract stablecoin users as DeFi makes it more affordable to process transactions.

“When it comes to stablecoins, what I think is missing at the moment, and what we are seeing — the scalability progress of the underlying infrastructure of blockchains — is that we now, like the AAVE protocol, are not just deployed in On Ethereum, Polygon and Avalance, also deployed at layer 2, such as Optimism and Arbitrum,” Kulechov said.

“And these Layer 2s radically reduce the cost of actually transacting and using blockchain-based security and inheriting Ethereum’s security in Layer 2,” he continued. “So what I’m thinking and what I’m envisioning is that we have the first ever, actually an opportunity to use stablecoins as internet money and solve real-world payments problems by still using blockchain.”

After being proposed in July and approved for development by the Aave community a few weeks later, GHO has experienced Security Audit of Open Zeppelin And it is planned to be released on Ethereum’s Aave V3 market.There is no actual release date yet, but October Dev Update Said that Aave V3 will be ready for the Ethereum mainnet in the coming weeks, a prerequisite for GHO.

GHO will enter a large and competitive market. According to statistics, of the $1 trillion global cryptocurrency market value, stablecoins account for $146 billion, or about 14%. Coin Tiger.

When it launches, Aave users will be able to mint GHO with deposited collateral, much like MakerDAO’s DAI stablecoin. But there are some key differences. For example, Aave will allow users to mint GHO against multiple types of collateral, rather than creating a separate vault for each asset like Maker does.

That makes it more efficient, Kulechov said. Fewer steps means users will spend less gas to deposit collateral and mint GHO.

“The key difference is that the AAVE community is using the AAVE protocol to create stablecoins. So, as a liquidity provider, you are actually providing liquidity to the AAVE protocol and profiting from those assets that you provide,” Kulechov said. “At the same time, you can mint stablecoins.

“It’s a more capital-efficient way to create stablecoins, but it also creates more diversity in the AAVE protocol stablecoin market,” he said.

Diversity of GHO-backed assets is another key feature, Kulechov explained.

For example, USD Coin (USDC), a centralized stablecoin from DAI, accounts for 52% of DAI’s collateralized assets (followed by Ethereum at 9% and Pax Dollar at 8%). Dai Statistics. One of the goals of GHO is to back it with a wider range of crypto assets.

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