Aave DAO Launches GHO Stablecoin on Arbitrum Network
Aave DAO has introduced its multi-collateralized stablecoin, GHO, on the Arbitrum network. This move marks the first step in the DAO’s phased strategy for cross-chain expansion.
Aave DAO Begins Cross-Chain Expansion With GHO on Arbitrum
Aave DAO has launched GHO on Arbitrum, utilizing the Chainlink Cross-Chain Interoperability Protocol (CCIP). This initiative aims to enhance accessibility, reduce transaction costs, and improve liquidity.
“The DAO’s measured approach to making GHO more accessible aligns perfectly with its commitment to stability and risk management,” stated Aave Labs Founder and CEO Stani Kulechov. “Integrating with other networks will lower fees, offer faster transactions, and enhance liquidity, making GHO more attractive to users and ushering in a variety of new use cases, including GHO digital payments.”
The introduction of GHO on Arbitrum aligns with a larger effort to broaden its presence beyond the Ethereum mainnet. The stablecoin, engineered for adaptability and security, employs a lock-and-mint model to facilitate transfers between Ethereum and other networks.
Aave DAO says the model ensures the total supply of the stablecoin remains stable, preserving collateralization and security across multiple blockchains. This expansion to Arbitrum comes after GHO faced challenges last year in maintaining its $1 peg. By January 2024, GHO successfully restored its value to the intended $1 parity.
To support this initiative, the Arbitrum DAO has allocated 750,000 ARB through its Long-Term Incentives Pilot Program. These incentives, overseen by the Aave Liquidity Committee, are designed to boost liquidity and promote the growth of GHO on the Arbitrum network. The phased rollout strategy will allow Aave DAO to thoroughly assess the implementation and gradually expand to additional networks.
