Odaily News: Since its launch in July, Aave's new stablecoin GHO has been trading between $0.97 and $0.99, lower than the expected price of $1.

Benjamin Levit, co-founder and CEO of stablecoin research company Bluechip, believes this is because GHO lacks a proper redemption mechanism and there is insufficient demand for the token. He said, "The peg has not been restored through arbitrage because GHO lacks a practical arbitrage mechanism to create demand."

Stani Kulechov, founder of Aave, defended GHO and believes that once improvements like the GHO Stability Module (GSM) are introduced in the coming months, GHO will regain its peg. The GSM allows users to collateralize other stablecoins to mint GHO, and GHO minted through the GSM can be redeemed 1:1 with the underlying collateral, creating arbitrage opportunities for some token supplies.

Kulechov recently tweeted, "The focus of the current model is the growing debt in GHO, which is growing quite well (almost 20 million). I think the focus on being anchored to the US dollar should come after this."

According to Etherscan data, Aave's native stablecoin GHO has surpassed 20 million in circulation since its launch on the Ethereum mainnet on July 15, reaching a current total of 22,462,715 tokens.