---
title: "Aave GHO"
url: "https://caper.network/wiki/daos/stablecoins/aave-gho"
updated: 2026-09-01
license: CC-BY-4.0
license_url: "https://creativecommons.org/licenses/by/4.0/"
---

# Aave GHO

| Project | GHO (Aave) |
| --- | --- |
| Category | Decentralized overcollateralized stablecoin · CDP |
| Chain | Ethereum + multichain via cross-chain messaging |
| Launched | [12 July 2023](https://www.pymnts.com/cryptocurrency/2023/aave-introduces-gho-stablecoin/), after an Aave governance vote |
| Stablecoin | GHO — USD-pegged, native to the Aave protocol, minted against Aave V3 collateral |
| Governance token | AAVE · stkAAVE (staked in the Safety Module) earns a GHO borrow-rate discount |
| Governance | **Maximally governed** — the borrow rate is a fixed value set by [Aave governance vote](https://governance.aave.com/), not a utilization curve; facilitator mint caps, the discount, and GSM assets are all governance parameters |
| Primary sources | [aave.com/docs](https://aave.com/docs/developers/gho) · [governance.aave.com](https://governance.aave.com/) |

**GHO** is a decentralized, [overcollateralized stablecoin native to the Aave protocol](https://aave.com/docs/developers/gho): borrowers mint it against collateral supplied to Aave V3, and it holds a US-dollar peg backed by that collateral rather than by fiat reserves. What makes GHO worth cataloguing here is not the peg mechanics but the _control surface_: nearly every lever that governs GHO — the interest rate borrowers pay, how much any given contract may mint, the discount stakers receive, which assets can defend the peg — is a live decision of the [Aave DAO](https://governance.aave.com/). That places GHO at the **maximally-governed pole** of the [DAO governance spectrum](/wiki/dao-governance/concepts/fundamentals/dao-governance-models) — the exact opposite of [Liquity’s ungovernable BOLD](/wiki/daos/stablecoins/liquity), and a clean case study in treating governance itself as monetary policy.

## The facilitator model

GHO is not minted by a single vault. Instead, Aave governance approves **facilitators** — contracts that can [trustlessly mint and burn GHO](https://aave.com/docs/developers/gho) up to a governance-set `bucketCapacity`. The original facilitators were the _Aave V3 Ethereum Market_ (where users borrow GHO against supplied collateral) and a _FlashMinter_; later additions include the GHO Stability Module. Each facilitator’s bucket is a hard, governance-owned ceiling on how much GHO it can bring into existence, so the total supply is bounded by an explicit ledger of votes rather than by market demand alone.

This is a deliberately different answer to “who decides how much stablecoin exists?” than an algorithmic issuer gives. Where [Liquity](/wiki/daos/stablecoins/liquity) lets any borrower mint against ETH under fixed immutable rules, GHO’s supply is gated by a governance-maintained set of facilitators and caps that can be raised, lowered, or revoked by proposal.

## An interest rate set by vote

The defining feature: GHO’s borrow rate is **a fixed number chosen by Aave governance**, not a curve that floats with utilization. Holders vote a rate based on the peg and market conditions, and the protocol charges it uniformly. To make routine adjustments without a full multi-day vote each time, governance delegates a bounded lever to **GHO Stewards**, who can [change the borrow rate by at most 500 bps per two-day period, up to a 25% APR ceiling](https://aave.com/docs/developers/gho), and raise the borrow cap toward a 100M threshold — a guarded, rate-limited delegation rather than open discretion.

Layered on top is a **staker discount**: users who stake AAVE in the Safety Module (stkAAVE) receive a reduction on their GHO borrow rate, applied per staked token up to a per-token GHO cap. The discount rate is itself a governance parameter. The rate a borrower actually pays is therefore a function of three governed inputs — the base rate, their stkAAVE balance, and the per-stkAAVE cap — a striking contrast to a purely mechanical fee.

## The GHO Stability Module and the governed peg

When the peg drifts, GHO does not rely solely on redemption arbitrage. The **GHO Stability Module (GSM)** lets users [swap GHO 1:1 for governance-approved tokens](https://aave.com/docs/developers/gho) (such as major fiat-backed stablecoins), with exposure caps, dynamic fee strategies, and oracle-based price-freeze protections — all governance-configured. If GHO trades above peg, minting and selling into the GSM pushes it down; below peg, buying and burning pulls it up. Because _which_ assets back the GSM and at what caps are votes, the peg backstop is a governance instrument, not a fixed algorithm.

Aave has continued to extend this surface: 2025 brought [stkGHO, anti-GHO, and a savings variant (sGHO)](https://oakresearch.io/en/analyses/innovations/aave-2025-three-horsemen-of-gho-stkgho-anti-gho-sgho) as governance-shaped ways to hold and stabilize GHO, each adding another parameter set the DAO maintains.

## Where it sits on the governance spectrum

GHO and [Liquity’s BOLD](/wiki/daos/stablecoins/liquity) are the two poles of the same design question, and reading them together is the point. Liquity protects a stablecoin by making its rules _immutable_ — no vote can touch the borrow rate or the peg logic, so there is nothing to capture. GHO protects a stablecoin by making its rules _maximally responsive_ — the DAO can retune the rate, the mint caps, and the peg backstop as markets move. Each buys something and pays for it: immutability buys credible neutrality at the cost of adaptability; governance buys adaptability at the cost of a standing [governance attack surface](/wiki/dao-governance/concepts/analysis/dao-security-and-governance-attacks) and a dependence on votes turning out. The [post-vote-escrow turn](/wiki/daos/lending/pendle-finance) elsewhere in this directory is a third answer again — retiring a governance lever once it has served its purpose.

## How Caper approaches this

Caper is a treasury-and-governance protocol, not a stablecoin issuer, so the honest contrast is about _who_ holds the parameters and whether a dissenter has an exit. On Aave, a borrower or AAVE holder who dislikes a governance-set GHO rate has no structural recourse beyond selling their position — the vote binds everyone who stays. In a [caper](/wiki/foundations/what-is-a-caper), the treasury _is_ the governed object, and two things differ. First, a member’s [vote weight](/wiki/governance/voting) is `(held × votes) / (vote_supply × circulation)` — a product of tokens held and a **soulbound, non-transferable record of taking part**, minted 1 per ranked ballot and 0.01 per XRD of gross value on each leg of a trade. Capital is not excluded and in fact counts twice over, since a bag bought on the curve mints its own record as it buys; what the formula rules out is acquiring _someone else's_ record, and a bag that arrived by transfer carries none of its own. Second, when you lose a parameter fight you can [exit with your share of the treasury](/wiki/dao-governance/concepts/membership/rage-quit-and-exit-rights) rather than only sell into the market — the majority cannot trap you in a policy you fought. (Mechanics verified against `compute_vote_weight` in `contracts/common/src/lib.rs` and `exit` in `contracts/logic/src/lib.rs`; framed at the outcome level, no invented features.)