Crypto Lender Aave Introduces GHO Stablecoin

Crypto lender Aave has debuted its first stablecoin.

Announced on the company blog Saturday (July 15), Aave’s GHO coin is now live on the ethereum network.

“GHO was developed with the same goal as the Aave Protocol: to enable a people-powered financial ecosystem, accessible to all, that everyone can benefit from,” the blog entry said. “With the Aave Protocol and GHO, people around the world have equal access to the same financial tools that are based on transparent and decentralized technology.”

Founded as ETHLend in 2017 by former Finnish law student Stani Kulechov, Aave rebranded in 2020 and saw its popularity quickly grow.

PYMNTS wrote last year that it was typically in second place behind Maker for the most total value locked (TVL) in a decentralized finance (DeFi) platform. A report Saturday by Bloomberg news called it the biggest DeFI lender.

“At its core, Aave works like most DeFi lending platforms: Lenders deposit funds into liquidity pools in exchange for yield — interest — transaction fees and governance tokens,” that report said. “Borrowers put up cryptocurrency as collateral, and borrow funds in the form of stablecoins without losing possession of their original crypto. If the value of the collateral drops too far and a margin call is not met, assets will be liquidated to pay off the loan.”

The launch is happening as regulatory pressure on the cryptocurrency sector threatens to impact stablecoins. As PYMNTS wrote last month: “Much may be at stake with staking.”

That observation came after the Securities and Exchange Commission (SEC) charged cryptocurrency companies Binance and Coinbase with a variety of securities laws violations.

This news “might send reverberations through the stablecoin market,” PYMNTS wrote in early June. “These two exchanges offer stablecoin staking. And staking, in general, can be big business for the platforms.”

As reported in Coinbase securities filing, blockchain rewards, which includes staking activity, made up $275 million worth of revenue, compared to more than $52 million two years ago. The latest tally represented a bit more than 8% of total revenues for the year.

The SEC’s complaint against Binance “is telling,” PYMNTS said. The SEC alleges Binance had engaged in the unregistered offer and sale of its own crypto assets, including a stablecoin, Binance USD (BUSD), and a staking-as-a-service program.

“If there’s a seismic shift in staking — if platforms abandon the practice on their own or might be forced to — the impact may be significant,” PYMNTS wrote.