LONDON, July 2, 2024
/PRNewswire/ -- 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.
As described in the proposal, the DAO opted to implement its
cross-chain strategy in a phased rollout, initially launching with
a single network, rigorously evaluating the implementation, and
progressively extending to additional networks. After public
discussion in the Aave forum, where different network opportunities
were presented, the DAO chose Arbitrum as the best option for the
initial cross-chain rollout. The integration of GHO into the
Arbitrum Aave pool as a borrowable asset marks a significant
initial step for GHO on this network and serves a dual benefit: it
allows users to supply GHO in exchange for yield, fostering initial
demand, and it gives all Arbitrum users access to a new
stablecoin option for borrowing. This not only aids in
diversifying the risk across different assets but also lays the
groundwork for the development of additional products and
features.
To facilitate the launch the Arbitrum DAO have allocated 750,000
ARB through the Long-Term Incentives Pilot Program. Aave DAO
service provider ACI has facilitated an incentive campaign from the
Arbitrum ecosystem to foster growth on Arbitrum. Incentives will be
available for the DAO, so service providers can use them. The Aave
Liquidity Committee will make use of these incentives to enhance
liquidity.
The information contained in this press release is provided for
informational purposes only and does not constitute an offer or
representation, express or implied, for the purchase or sale of any
product or service. This release may contain forward-looking
statements and is subject to change without notice. Neither
Chainlink Labs Avara or The Arbitrum Foundation makes any
representation or warranty, express or implied, as to the accuracy
or completeness of the information contained in this release and
neither party shall have any liability for any errors,
incompleteness, interruption or delay in the content, or for any
actions taken in reliance thereon.
Additional Resources:
You can find relevant documentation and resources about GHO
here.
For more information on the DAO cross-chain strategy and rollout
plan, please visit the Aave Community Forum here.
For more information on CCIP, go to the official Chainlink
documentation.
For information on Arbitrum, please visit here.
Aave Protocol:
Aave is a non-custodial,
open-sourced decentralized liquidity
protocol that allows users to act as depositors and earn passive
income, as well as borrow a wide range of digital assets without
the need of third-party intermediaries. Core capabilities include
risk mitigation features such as supply and borrow caps, and flash
loans which allow users to borrow and repay assets within the same
blockchain transaction block. GHO is a
decentralized, overcollateralized
stablecoin that is native to the Aave
Protocol. The Aave Protocol is fully governed by
the Aave Decentralized Autonomous
Organization (DAO). Visit
https://governance.aave.com/ to learn more and take part
in Aave Governance.
Aave Labs
Focused on
decentralized finance, Aave Labs is
part of Avara. The team built the Aave
Protocol and GHO and is a technical contributor
to the Aave Protocol. GHO, the
Aave-native stablecoin, is backed by
multiple collaterals available in Aave V3
and is designed to serve as the internet payment layer.
About Chainlink
Chainlink is the industry-standard
decentralized computing platform powering the
verifiable web. Chainlink has enabled over $12 trillion in transaction value by providing
financial institutions, startups, and developers worldwide with
access to real-world data, offchain computation, and secure
cross-chain interoperability across any blockchain. Chainlink
powers verifiable applications and high-integrity markets for
banking, DeFi, global trade, gaming, and other major
sectors.
Learn more about Chainlink by visiting chain.link or reading the
developer documentation at docs.chain.link.
About The Arbitrum Foundation
The Arbitrum Foundation
is a Cayman Islands foundation
company that is tasked with shepherding and nurturing the Arbitrum
ecosystem. Abritrum is controlled by the Arbitrum DAO and The
Foundation operates as a neutral steward in order to support the
ArbitrumDAO, the continuous innovation of the Arbitrum technology
and the development and education of the Arbitrum community.
You can learn more about the Foundation and Arbitrum at
https://docs.arbitrum.foundation/gentle-intro-dao-governance
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SOURCE Chainlink; Arbitrum Foundation; Aave Labs