Aave Community Votes On Next Network To Host GHO

The Aave community is voting on which chain will become the second network to host GHO, its native decentralized stablecoin.

Aave launched an initial temperature check proposal on April 20, allowing AAVE holders to vote on which network will host GHO’s second deployment since its initial Ethereum mainnet launch in July 2023.

“After receiving multiple network proposals and insights from risk providers, it is now time for the community to make a decision on the preferred network for the initial launch of the cross-chain GHO strategy,” the proposal said.

As of this writing, the Avalanche Layer 1 blockchain is the leading contender with 49% of votes, beating out leading Ethereum Layer 2s Arbitrum with 44.4%, Optimism with 6.47%, and Scroll and Metis with less than 0.05% each.

The latest proposal follows the Aave community approving Chainlink’s Cross Chain Interoperability Protocol (CCIP) as the infrastructure underpinning GHO’s multi-chain expansion with near-unanimous support in early March.

Debt ceiling

Aave’s planned cross-chain expansion for GHO follows the token maxing out its 48 million debt ceiling in early March. New GHO is exclusively minted by Aave users who deposit collateral assets to the Aave protocol.

In March, Aave’s Marc Zeller said the team would monitor GHO’s peg stability before raising its debt limit. Data from CoinGecko shows the price of GHO predominantly oscillating between $0.99 and $1 since early March.

GHO experienced relatively slow adoption in the months following its launch as the token failed to achieve parity with the U.S. dollar until February 2024. The token slumped to an all-time low below $0.96 in November, precipitating the launch of a “Liquidity Committee” tasked with restoring the token’s peg.