Aave overcollateralized stablecoin GHO goes live on testnet! How to use it, take a sneak peek

Leading decentralized lending protocol Aave, after launching the decentralized stablecoin GHO proposal in July last year, finally went live on the Ethereum Goerli testnet yesterday (9th). The official also released a tutorial video on how to borrow and repay GHO in practice.

It’s GHO time!

According to Aave's Twitter content, the official website of GHO is now live, where you can view GHO code and SDK technical documentation. You can also experience GHO-related functions on the Goerli testnet and watch tutorial videos.

The borrowing process of GHO is quite simple, following the overcollateralization method where users need to provide specified assets as collateral.

Both borrowing and repayment can be completed in just one step, with a process almost identical to using the Aave protocol. The difference is that when users repay, the protocol will directly burn the received GHO, and all interest income generated from borrowing GHO will be transferred directly to the AaveDAO treasury.

Furthermore, the borrowing interest rate of GHO will be determined by AaveDAO and adjusted according to market conditions. The current testnet rate is 2%. Holders of stkAAVE tokens can obtain a discount on the GHO borrowing interest rate by staking AAVE, with a discount of up to 20% based on the amount held.

The calculation of the interest rate discount for GHO is as follows: for every AAVE token staked, you can borrow 100 GHO at the lowest rate. Therefore, to borrow 10,000 GHO at the lowest rate, you need to stake at least 100 AAVE tokens.