Introducing GHO Stablecoin: Aave’s Latest Innovation In Crypto Lending
Aave, a cryptocurrency lender, has launched its first stablecoin. Aave’s GHO token, declared on the company blog on Saturday (July 15), is live on the Ethereum network.
The blog entry explained that GHO was created with a similar purpose as the Aave Protocol. They both aim to create a financial system powered by people and available to everyone. The goal is to provide equal access to financial tools built on transparent and decentralized technology for people worldwide.
Former Finnish law student Stani Kulechov founded Aave in 2020 under the new name ETHLend, and it soon gained popularity.
In an article published last year, PYMNTS stated that Maker typically had the most significant total value locked (TVL) in a decentralized finance (DeFi) platform. It was referred to as the largest DeFI lender in a Bloomberg News report on Saturday.
According to the report, Aave performs similarly to other DeFi lending platforms. Lenders deposit their funds into liquidity pools and receive returns from interest, transaction fees, and governance tokens. Borrowers provide cryptocurrency as collateral and can borrow stablecoins without giving up ownership of their original crypto. If the value of the collateral falls significantly and the borrower fails to meet a margin call, the assets will be sold off to repay the loan.
The opening comes as regulatory stress on the cryptocurrency industry risks have consequences on stablecoins. As PYMNTS pointed out last month, “Much may be at stake with staking.”
Recent allegations made by the Securities and Exchange Commission (SEC) cryptocurrency businesses Binance and Coinbase with an assortment of securities laws infractions.
This announcement “might send reverberations through the stablecoin market,”
According to PYMNTS, who reported on it in early June. These two exchanges offer stablecoin staking. And staking, in general, can be big business for the platforms.
According to a Coinbase securities filing, blockchain encouragements, including staking activity, developed $275 million in revenue, up from over $52 million two years ago. The most recent figure was less than 8% of overall revenue for the year.
According to PYMNTS, The SEC’s case against Binance “is telling” because the SEC claims Binance participated in the unregistered offer and sale of its crypto assets, including a stablecoin, Binance USD (BUSD), and a staking-as-a-service program.
“If there’s a seismic shift in staking — if platforms abandon the practice on their own or might be forced to — the impact may be significant,” PYMNTS Stated.
