<\/p>\n
The Liquidity Committee had a target of $0.985 by November 30th, topping it and reaching $0.99 yesterday.<\/p>\n
Aave\u2019s recently launched<\/a> stablecoin GHO nearly hit parity with the US Dollar yesterday, as the project\u2019s DAO continues its plan<\/a> to \u201cgently nudge\u201d it towards $1\u2013a peg it has not been able to reach since July, when the token first appeared.<\/p>\n Yesterday\u2019s almost re-peg is the result of an effort by Aave\u2019s Liquidity Committee<\/a>, led by its member TokenBrice, considered the committee\u2019s \u201cbenevolent dictator.\u201d Succeeding with a couple of days to spare, the group had established a price target of $0.985 by November 30th.<\/p>\n GHO is a stablecoin native to the Aave<\/a> protocol, allowing users to mint it using a wide range of collateral. It has never been 1:1, and according to dexscreener<\/a>, currently changes hands at $0.982. Jumping ahead of the news yesterday, the network\u2019s native token, Aave, has since dropped -1% in the past 24 hours, as per<\/a> Coingecko, trading today at $97.11.<\/p>\n According to Marc Zeller<\/a>, founder of the Aave Chain Initiative, getting closer to the $1 dollar mark, and surpassing their target ahead of time, is the result of \u201csynergistic simultaneous efforts.\u201d<\/p>\n Zeller told The Defiant <\/em>that five factors fueled GHO\u2019s rise.<\/p>\n He explained that the committee set a limit to the bucket size of $35 million with which facilitators can mint new GHO and increased the GHO borrow rate in line with average rates among other stablecoins. <\/p>\n He added that they\u2019ve incentivized \u201cbuy wall\u201d liquidity on Maverick, an automated market maker that allows for highly customizable liquidity pools, and created StkGHO to \u201ccreate a liquidity sink and diversify the protection\u201d of the asset protocol.<\/p>\n Lastly, Aave\u2019s Liquidity Committee \u201csynced\u201d with other DAOs to diversify their stablecoin holdings, creating significant buying pressure for GHO on secondary markets.<\/p>\n Since the interest rate for the stablecoin is determined by governance, that lack of flexibility has meant there isn\u2019t a mechanism to adjust the rate when market conditions vary. <\/p>\n Start for free<\/a><\/div>\n This has led to GHO\u2019s borrowing rate to remain below that of some of its competitors, such as DAI or USDC.<\/p>\n Another contributing factor for GHo to remain sub $1, has been the lack of attractive yield opportunities for GHO holders\u2013although the Liquidity Committee\u2019s plan is to change that. Until now, alternative stablecoin farms such as MakerDAO\u2019s DAI Saving Rate have been of more interest for investors.<\/p>\n Hitting its $0.985 target doesn\u2019t mean the mission is complete and the committee is in the clear.<\/p>\n \u201cTo be honest, it\u2019s half the journey,\u201d Zeller said, pointing out that now the team has to solidify liquidity at the peg with \u201cstrong incentives.\u201d He\u2019s referring to the double digit yield options currently available on Maverick Protocol<\/a>, which currently range from 34 \u2013 45%. These should only last a couple of months, however, with Zeller telling The Defiant <\/em>that there\u2019s \u201cno free lunch and they ain\u2019t\u201d Terra Luna<\/a>.<\/p>\n Adding to these yield rates, the GHO Liquidity Committee (GLC) will also look to rebalance the Balancer Pools that are currently in excess of GHO, along with launching aCRVUSD\/GHO and use the CRV DAO to incentivize liquidity around the peg on Curve.<\/p>\n For Zeller, once the protocol reaches a \u201ccritical mass of sane liquidity\u201d around the peg, the team will propose the DAO a \u201cStop and GHO\u201d approach to gradually increase the supply of the stablecoin. Until then, he concluded, \u201cit\u2019s all hands on deck.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The Liquidity Committee had a target of $0.985 by November 30th, topping it and reaching $0.99 yesterday. Aave\u2019s recently launched stablecoin GHO nearly hit parity with the US Dollar yesterday, as the project\u2019s DAO continues its plan to \u201cgently nudge\u201d it towards $1\u2013a peg it has not been able to reach since July, when the […]<\/p>\n","protected":false},"author":2,"featured_media":203286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-203285","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/203285","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=203285"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/203285\/revisions"}],"predecessor-version":[{"id":203288,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/203285\/revisions\/203288"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/203286"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=203285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=203285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=203285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Sub $1 Dollar GHO<\/strong><\/h2>\n
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What\u2019s Next for GHO<\/strong><\/h2>\n