Aave Launches GHO Stablecoin On Arbitrum

The move marks the first deployment of GHO's cross-chain expansion.

By: Samuel Haig Loading...

Aave Launches GHO Stablecoin On Arbitrum

Aave, the top DeFi lending protocol by TVL, has begun shipping its GHO stablecoin onto new networks.

On July 2, Aave deployed GHO on Arbitrum, the top Layer 2 network by total value locked (TVL). The move allows users to natively mint and burn GHO using the Aave v3 deployment on Arbitrum.

“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,” said Stani Kulechov the founder and CEO of Aave Labs.

The Arbitrum DAO has allocated 750,000 ARB tokens (582,300) to incentivize GHO adoption on the network.

Aave users can mint GHO against collateral assets deposited onto the Aave protocol. GHO is currently the 21st-largest stablecoin with an $89.1 million market cap, according to CoinGecko.

The price of AAVE is down 3.3% over the past 24 hours, according to The Defiant’s crypto price feeds.

GHO’s multichain expansion

Aave noted that the Arbitrum deployment marks the first milestone in GHO’s phased cross-chain expansion.

In May, the Aave community voted in favor of launching a cross-chain launch strategy for GHO with 100% support. “The current limitation of GHO, which is primarily accessible only via minting on the Ethereum mainnet or through secondary markets, represents a significant constraint in its potential reach and utility across DeFi,” the proposal said.

Aave is leveraging Chainlink’s cross-chain interoperability protocol (CCIP) to facilitate power GHO’s cross-chain expansion. Each GHO deployment will be backed by reserves held on Ethereum.

“Although GHO is issued on 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 the 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 GHO’s Arbitrum deployment will undergo rigorous evaluation before selecting additional networks to host the stablecoin through community governance. In April, AAVE holders voted to select Arbitrum for GHO’s first cross-chain rollout with 87.5%, followed by Avalanche with 12.2%.

Aave eyes non-EVM deployments

Avara, the development company behind Aave, is also planning on deploying Aave onto new networks.

On May 1, Avara unveiled a three-year roadmap for Aave including the launch of a new v4 iteration, Layer 2 network, and deployments onto non-EVM networks.

On July 1, the Aptos Foundation published a preliminary temperature check proposal advocating for Aave v3’s first non-EVM launch to take place on the Aptos Layer 1 network. Aptos supports the Move programming language rather than Solidity — which is utilized by most EVM networks.

Aptos committed to providing up to 2 million APT tokens ($13.76 million) to fund liquidity mining incentives on the deployment.

The proposal has received widespread support on Aave’s governance forum, including from Aave Labs.

“Aave Labs has conducted extensive research into the Aptos ecosystem, the technical infrastructure, and the Move programming language,” Aave Labs 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 pioneer this first-ever non-EVM deployment of Aave V3.”

Chainlink’s CCIP facilitates cross-chain transfers across both Ethereum Virtual Machine (EVM)-compatible networks and non-EVM chains, meaning GHO could also make its way onto Aptos in the future. CCIP uses a burn-and-mint mechanism to enable transfers across non-EVM networks.

Related: Aave Labs Receives Grant To Develop V4 Iteration Over 12 Months