TechFlow news: Since its launch, GHO, the native algorithmic stablecoin introduced by Aave, has traded in the range of $0.97 to $0.99, below the expected peg of $1. According to Bluechip, a stablecoin research firm co-founded by one of its founders, this is because GHO lacks an arbitrage mechanism to restore its peg.
Stani Kulechov, founder of Aave, said that once the GHO stability module goes live, minting GHO by collateralizing other stablecoins will create arbitrage opportunities, helping restore the $1 peg. He emphasized that the current focus is on expanding GHO's debt supply, which is showing promising growth momentum.
Data shows that GHO's issuance has exceeded 20 million tokens and continues to gradually increase. Kulechov expects that once further mechanism upgrades are implemented, GHO will be able to re-peg to the US dollar.
