Following community discussions and voting, the Aave DAO has launched GHO on the Arbitrum network – the DAO’s first new market in its phased GHO cross-chain expansion strategy. GHO, the multi-collateralized stablecoin native to the Aave Protocol, will utilize the industry standard Chainlink Cross-Chain Interoperability Protocol (CCIP) and rollout progressively, beginning with Arbitrum as the first network and expanding over time to other networks. The expanded availability of GHO beyond Ethereum mainnet aims to increase accessibility, lower transaction costs, enhance the user experience, and improve liquidity, fostering greater adoption and spurring innovation. Although GHO is issued on Ethereum mainnet, the cross-chain strategy enabled by Chainlink CCIP will open the door to integration opportunities and new use cases. With the expansion to Arbitrum, the largest Layer 2 network with $17.7B in TVL, GHO becomes a borrowable asset in the Aave Arbitrum pool, making GHO more available in a cost effective way with additional use cases expected to follow.
“Congratulations to the Aave community on achieving this milestone for GHO’s expansion beyond Ethereum mainnet to Arbitrum,” said Aave Labs Founder and CEO Stani Kulechov. “The DAO’s measured approach to making GHO more accessible, aligns perfectly with its commitment to stability and risk management. Integrating with other networks will lower fees, offer faster transactions, and enhance liquidity, making GHO more attractive to users and ushering in a variety of new use cases, including GHO digital payments.”
“We are excited to see that the Aave DAO has chosen Arbitrum as the first platform to launch its GHO stablecoin. This integration is poised to revolutionize accessibility, lower transaction costs, and unlock unprecedented liquidity. As decentralized finance continues to advance, we are looking forward to seeing more transformative new use cases across Arbitrum.” said Nina Rong, Head of Ecosystem Development at The Arbitrum Foundation
“Excited to see that the Aave community has voted to choose the security of Chainlink’s CCIP as its interoperability solution for cross-chain GHO transfers. I have always seen the developers of Aave prioritize security, thanks to their deep understanding of the dynamics around keeping user value secure. CCIP does provide a large improvement on the security of other cross-chain systems, which is what will come to define it as the leading cross-chain infrastructure, just like the security of Chainlink Data Feeds is what led them to become the leading source of data in DeFi,” said Sergey Nazarov, Co-Founder of Chainlink.
For secure and cost-effective GHO cross-chain transfers, the Aave DAO chose CCIP, which is compatible with both EVM and non-EVM networks, enhances risk mitigation, security, and user experience through advanced features and mechanisms like rate limits, flexible billing, Programmable Token Transfers, a well-audited codebase, and a first of its kind separateRisk Management Network. Additionally, CCIP’s cross-chain security innovations empower the DAO through important risk management levers such as configurable rate limits and the ability to control GHO bridge logic. Backed by Chainlink’s battle-tested infrastructure, CCIP is widely adopted across DeFi and capital markets and supports existing Aave deployments, helping to ensure smooth and secure cross-chain expansion for GHO.
GHO was designed to be a secure multi-chain stablecoin architectured for flexibility. Arbitrum has, and every chain with GHO in the future will have, its own GHO version, backed by reserves on Ethereum, for sufficient collateralization. For secure cross-chain transfers between Ethereum and non-Ethereum chains like Arbitrum, GHO uses a lock-and-mint model enabled by CCIP, where tokens are locked on Ethereum while an equivalent amount is minted on the other network, keeping the total supply constant. As additional chains are supported, transfers between non-Ethereum chains will use a burn-and-mint model enabled by CCIP for maximum capital efficiency and fungibility, while still being backed by reserves on Ethereum. This ensures security and flexibility for GHO’s future expansion across multiple blockchains.
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