DeFi
Aave Launches GHO Stablecoin on Arbitrum
This transaction marks the first deployment of GHO’s cross-chain expansion.
Aave, the leading DeFi lending protocol by TVL, has started shipping its GHO stablecoin on new networks.
On July 2, Aave rolled out GHO on Arbitrum, the highest performing Layer 2 network in terms of Total Value Locked (TVL). This initiative allows users to natively create and burn GHOs using the Aave v3 deployment on Arbitrum.
“Integrating with other networks will reduce fees, deliver faster transactions, and improve liquidity, making GHO more attractive to users and paving the way for a variety of new use cases, including GHO digital payments,” said Stani Kulechov, Founder and CEO of Aave Labs.
The Arbitrum DAO has allocated 750,000 ARB Tokens (582,300) to encourage the adoption of GHO on the network.
Aave users can create GHO against collateral assets deposited on the Aave protocol. GHO is currently the 21st largest stablecoin with a market cap of $89.1 million, according to CoinGecko.
THE AAVE price is down 3.3% over the past 24 hours, according to The Defiant cryptocurrency price feed.
GHO’s Multi-Chain Expansion
Aave noted that the deployment of Arbitrum marks the first step in the gradual expansion of the GHO chain.
In May, the Aave community voted to launch a cross-chain launch strategy for GHO with 100% “GHO’s current limitation, which is primarily only accessible via minting on the Ethereum mainnet or through secondary markets, represents a significant constraint in its potential reach and utility across DeFi,” the proposal states.
Aave Builds on Chainlink Cross-chain interoperability protocol (CCIP) to facilitate cross-chain expansion of Power GHO. Each GHO deployment will be backed by reserves held on Ethereum.
“Although GHO will be issued on the Ethereum mainnet, the cross-chain strategy enabled by Chainlink CCIP will open the door to integration opportunities and new use cases,” Aave said.
Aave v3 is currently live on 12 networks, including Layer 1 networks Ethereum, Avalanche, BNB Chain, Fantom, and Harmony, and Layer 2 chains Base, Arbitrum, Optimism, Gnosis, Base, Scroll, Metis, and Polygon.
Aave said that GHO’s Arbitrum deployment will undergo rigorous evaluation before selecting additional networks to host the stablecoin via community governance. In April, AAVE holders vote to select Arbitrum for the first cross-chain deployment of GHO with 87.5%, followed by Avalanche with 12.2%.
Aave Considers Non-EVM Deployments
Avara, the development company behind Aave, also plans to deploy Aave on new networks.
May 1st, Avara revealed a three-year roadmap for Aave including the launch of a new v4 iteration, Layer 2 Networkand deployments on non-EVM networks.
On July 1, the Aptos Foundation published a preliminary temperature control proposal recommending that the first non-EVM launch of Aave v3 take place on the Aptos Layer 1 network. Aptos supports the Move programming language rather than Solidity, which is used by most EVM networks.
Aptos has committed to providing up to 2 million APT tokens ($13.76 million) to fund liquidity mining incentives upon deployment.
The proposal received broad support on the Aave Governance Forum, including from Aave Labs.
“Aave Labs has conducted extensive research into the Aptos ecosystem, technical infrastructure, and Move programming language,” Aave Labs said. said“Aptos and Move offer new and exciting use cases that were not previously possible with the EVM… Aave on Aptos is an opportunity to launch this first-ever non-EVM deployment of Aave V3.”
Chainlink’s CCIP facilitates cross-chain transfers on both Ethereum Virtual Machine (EVM)-compatible networks and non-EVM chains, meaning GHO could also make its way to Aptos in the future. CCIP uses a burn and mint mechanism to enable transfers on non-EVM networks.
Related: Aave Labs Receives Grant to Develop V4 Iteration Over 12 Months