- GHO has launched on the Ethereum mainnet.
- Aave has replaced MakerDAO as the DeFi protocol with the second-largest TVL.
Following the ratification of a proposal to do the same, lending protocol Aave [AAVE] finally launched its over-collateralized stablecoin GHO on the Ethereum Mainnet on 15 July.
The Aave DAO has successfully launched @GHOAave on the Ethereum Mainnet. Congrats to the Aave community on this historic moment! pic.twitter.com/Br3QGqMU8X
— Aave (@AaveAave) July 15, 2023
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According to the announcement blog post, with the stablecoin made available on Ethereum mainnet, “users can mint GHO on the Aave Protocol’s Ethereum V3 market against assets they have already supplied as collateral.”
The launch of GHO came after the execution of a governance proposal put forward by Aave’s decentralized autonomous organization on 10 July.
According to the blog post, the DAO is responsible for governing GHO. The members of this governing body will determine the stablecoin’s supply, interest rates, and minting limits. They will also approve and oversee facilitators who can create GHO under specific conditions.
Aave overtakes Maker; GHO to propel it even further
According to data from DefiLlama, with a total value locked (TVL) of $6.124 billion, Aave has overthrown MakerDAO [MKR] as the decentralized finance (DeFi) protocol with the second largest TVL after Lido [LDO].
Source: DefiLlama
At the beginning of the year, Lido replaced Maker as the leading DeFi protocol. This was due to an increased Ether [ETH] staking activity in expectation of Ethereum’s Shanghai Upgrade, which drove traffic to the liquid staking protocol.
The situation worsened for the lending protocol when its stablecoin DAI suffered a depeg in March due to the unexpected collapse of Silicon Valley Bank. This resulted in an unabated fall in DAI’s supply.
With GHO now live on Ethereum, a new crop of users is expected to try out Aave, further driving up its TVL.
Per information from DefiLlama, while Aave’s TVL climbed by 20% in the last month, Maker’s fell by 2%.
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Revenue to climb while network activity rebounds
According to on-chain data provider Token Terminal, Aave’s daily active user count has trended downward in the last year. Data from Token Terminal revealed a 27% fall in daily user activity during that period. As many flocks to Aave to try out the latest stablecoin in the market, network activity on the lending protocol is expected to experience growth.
Regarding protocol revenue, Aave’s revenue has declined by 70% in the last year. This corresponds with a 75% decrease in transaction fees users pay for using the lending protocol. With the launch of GHO, a positive revenue rebound might be on the horizon.