AAVE's decentralized and stable GHO goes online on the testnet: What are the stages of progress?
On February 9th, $GHO, a decentralized USD stablecoin issued by Aave, was officially launched on the Ethereum Goerli test network for developers and community users to access its interface to detect potential problems in its workflow. Net supports four assets: DAI, USDC, AAVE and LINK.
And a new facilitator ("Facilitator) has been added to support the FlashMinting (lightning casting) mode, which can play the same role as flashloan and is intended to improve transaction efficiency.
This release of the fourth audit report issued by ABDK, combined with the previously issued reports of Open Zepplin and SigmaPrime, the final audit work of the mainnet launch is almost complete.
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One step away: the testnet is fully functional
According to Aave's previous plan, GHO should have been launched in November last year or January this year, but in the end, after Aave V3 was launched on the Ethereum mainnet on January 27 this year, GHO officially started the internal test on V3. Better coordinate with Aave.
GHO still needs over-collateralized assets to lend out GHO, and maintains the peg between the price and the US dollar through the arbitrage mechanism, but in terms of the specific mechanism, there are the following innovations:
"Facilitator" (facilitator): Any agreement, entity or project can apply to become a facilitator. The facilitator can determine the method and strategy of destroying GHO by itself. The first facilitator is Aave itself;
"Asset Bucket" (Bucket): The promoter's GHO holdings will have a normalized limit to stabilize the GHO price and liquidity;
"Discount": The rate is calculated based on stkAAVE holdings, and only stkAAVE is eligible for GHO's borrowing discount.
In this update, the facilitator will usher in important progress, and will welcome the second facilitator after Aave for the first time to test the FlashMinting mode.
In the migration of Aava V2 to V3, one of the main problems is that GHO cannot be used in the flashloan mode to ensure the security of the protocol and avoid price uncoupling due to reflexive issues. FlashMinting provides the same functions as Flash Loan, but instead of borrowing assets from the fund pool, users can complete the entire process of Mint GHO and repaying assets in one transaction.
However, it should be noted that the proposal to introduce this mode still requires a final vote from the DAO to take effect.
The establishment of the Facilitator Framework is also discussed. According to Aave's vision, the facilitator will be the main operator of the Bucket (storage bucket). This time, more facilitators will be gradually introduced to gradually establish a Curve-like stable The exchange depth of the currency pool, while ensuring the free customization system of the promoters.
GHO's own Peg Stability modules (PSMs) "pegged stability module" is also undergoing pre-research at the same time, and will try related functions in this test. Considering the asset supply behind GHO, it should be temporarily limited to the Aave protocol. It is a high-probability event, and it is still uncertain whether an exchange pool on other protocols can be established.
You can refer to the collapse of UST, the point where the liquidity on Curve was drained, and it was attacked by arbitrageurs with huge funds, which eventually led to the price unanchored.
The problem with adopting the PSM mechanism is that it will inhibit the expansion of protocol income, but AaveDAO will be the only source of protocol income, so it can guarantee the smooth adoption of this model, and the coordination of stkAAVE and the enthusiasm of promoters is the key to promoting GHO liquidity .
In the current test network, users can receive DAI/USDC/AAVE/LINK four types of assets for testing to experience the process and feedback bugs for the team to make subsequent changes and improvements. It should be noted that due to participation in the test network There may be a large number of people, and there may be a problem of failure to receive test tokens, which requires multiple attempts.
In addition, it is worth mentioning the completeness of the audit, GHO has undergone four complete audits to ensure its security.
Taking the latest ABDK review as an example, functional tests and security audits were carried out on all codes. A total of 6 revisions were proposed in 85 categories. According to the progress of GHO, there will be a security review before the official launch. audit.
GHO launches update plan on mainnet
Rework stkAAVE to accommodate the discounted rate model that the GHO will implement;
Preliminary establishment of bucket capacity cap and borrowing rate framework. It is necessary to reflect the current market situation and ensure the stability of GHO price as much as possible;
Aave will launch more AIPs (Aave Upgrade Proposals) to ensure the subsequent improvement and enhancement of GHO, such as whether to add more promoters;
The bug bounty program will issue a security bug bounty of up to 250,000 USDC to encourage white hats and users to report bugs;
The community will have complete management authority, and Aave will participate more as a builder to maintain decentralization and anti-censorship features to the greatest extent.
epilogue
Aave will explore the new DeFi narrative of lending + stable currency.
In 2022, after UST collapsed and USDC sanctioned Tornado Cash in response, a new round of decentralized stablecoin model began to take shape: issued by a large DeFi protocol to ensure its decentralization and usage scenarios, while maintaining on-chain asset support. Overcollateralization mode to avoid the danger of extreme algorithmic stablecoin mode.
crvUSD and GHO are among the leaders, while FRAX and DAI have regained their vitality and survived the most difficult and darkest moments.
At the moment, LSD and stablecoins have also become new DeFi business explosion points, and stablecoins will become an important means for DeFi protocols to consolidate their own moats.
