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The decentralized finance (DeFi) protocol Aave recently unveiled its revolutionary GHO stablecoin on the Ethereum mainnet. The stablecoin launch has seen increased popularity, as evidenced by the rapid surge in the circulating supply of the GHO, soaring by $1.5 million in a single day.

Aave Seeks Transparency with Ethereum Mainnet Launch

In a recent announcement by Aave, the GHO stablecoin has joined the algorithmic digital coins ecosystem and is pegged to the value of the USD. What sets GHO apart is that it is backed by several digital assets, notably Ethereum’s native currency Ether (ETH) and Aave’s native token AAVE, which helps to bolster its stability and reliability.

Furthermore, the skepticism surrounding centralized stablecoin issuers like Tether (USDT) cannot be overlooked. Such criticisms include concerns about the lack of transparency surrounding their reserves.

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The confusion surrounding Tether’s asset backing has raised doubts and cast shadows on its credibility. Accordingly, Aave has taken a bold step towards enhanced transparency by introducing GHO.

The protocol stresses that all assets supporting the GHO stablecoin would undergo rigorous verification processes to ensure complete transparency. By prioritizing transparency, Aave instills confidence in users and the wider crypto community and sets a new standard for stablecoin protocols.

Its GHO stablecoin, backed by verifiable and transparent assets, provides stability and establishes a model for a more trustworthy decentralized finance ecosystem. According to the protocol, all information is readily available and can be audited directly from the blockchain or other compatible user interfaces.

More Traction For DeFi-Based Algorithmic Stablecoins    

Recently, DeFi-related algorithmic stablecoins have been gaining traction and popularity. Undoubtedly, MakerDAO’s DAI is currently the preferred choice among algorithmic stablecoins enthusiasts.

According to current data from DefiLlama, this Ethereum-based stablecoin holds a market capitalization of nearly $4.3 billion. In addition to MakerDAO, other notable algorithmic stablecoins like Frax and Ampleforth have attracted significant attention from interested investors.

Furthermore, Curve, another notable DeFi protocol, launched its flagship algorithmic token, crvUSD, adding to the increasing number of DeFi-native algorithmic stablecoins.

While the rise of DeFi-native algorithmic stablecoins is noteworthy, centralized stablecoins continue dominating the stablecoin market, with Tether (USDT) and Circle (USDC) leading players in this space.

The combination of these two stablecoins accounts for no less than 87% of the total circulating supply of all US dollar-pegged stablecoins. Moreover, Tether has solidified its position as the largest player in the market, maintaining a significant market share.

The emergence of algorithmic stablecoins is essential after the debacle surrounding the crash of Terra’s algorithmic stablecoin (UST), with MakerDAO’s DAI and Aave’s GHO steadily gaining prominence.

At the time of writing, GHO is trading at $0.9909, according to current Coinmarketcap data.

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George Ward

By George Ward

George Ward is a crypto journalist and market analyst at Herald Sheets, known for his engaging articles on the latest digital currency trends. With a background in finance and journalism, he presents complex topics accessibly. George holds a degree in Business and Finance from the University of Cambridge.