Crypto lender Aave presented his first stablecoin called GHO.
The lender’s message, which was published last weekend on its blog, contains information that the stablecoin is already available on the Ethereum network. This message also indicates that the purpose of creating GHO is similar to the purpose of the Aave protocol. In this case, it is implied that the lender seeks to form a financial ecosystem based on people and accessible to everyone. Aave also wants to create conditions under which this financial space, existing in the digital dimension, will allow everyone who decides to perform commercial actions in the appropriate system to benefit.
The lender’s blog claims that thanks to the Aave and GHO protocols, people around the world get equal access to financial instruments created on the basis of transparent and decentralized technology.
Aave was founded in 2017 by Stani Kulechov and had the name ETHLend. After the rebranding carried out in 2020, the lender received its current name.
Aave is in second place after Maker in terms of the largest number of blocked values (TVL) on a decentralized financial platform (DeFi).
In fact, the company operates like most DeFi credit platforms. This means that the lender deposits funds into liquidity pools in exchange for setting a commission fee for financial operations with profitability and interest, as well as in exchange for management tokens. Borrowers in this case provide cryptocurrencies as collateral and take funds in the form of stablecoins while remaining the owners of their original digital money. If the fall in the value of the collateral is excessive and makes it impossible to comply with the margin requirement, the assets will be used to repay the loan.
Currently, there is an intensification of regulators regarding attempts to form ways to influence the crypto sector, which has the potential to negatively affect stablecoins.
This is confirmed by the fact that the US Securities and Exchange Commission has accused the Binance and Coinbase crypto exchanges of violations of securities legislation. Both exchanges offer the placement of stablecoins, which means that the actions of the regulator may negatively affect the situation in the digital currency market of this category.
The Coinbase securities report contains information that the revenue from blockchain rewards amounted to $275 million for 2022. By the end of 2020, this figure slightly exceeded the $50 million mark.
Experts say that if the SEC will succeed in regulating crypto exchanges, there may be shifts in the placement of bets, which will become a significant factor influencing the market. For the crypto industry, the implementation of such a scenario is not a favorable prospect.
As we have reported earlier, Hong Kong Eyes Stablecoin Regulatory Regime by 2024.