Coin columns · Ethereum City (Capital)
GHO: Aave’s Own Dollar Stablecoin, Minted Through Loans
The overcollateralized, DAO-run dollar coin of Aave
GHO is a dollar-pegged stablecoin launched in 2023 by Aave, the lending service on Ethereum. It is not issued by a bank or company; new GHO is created only when people borrow less than the collateral they deposit.
1. A stablecoin made inside Aave
GHO is issued by Aave, a lending protocol (a financial service run by code instead of a company). Aave began in 2017 as ETHLend and took its current name in 2018; ‘aave’ is Finnish for ‘ghost’. Decisions such as interest rates and issuance limits are voted on by the Aave DAO (an organization run by token holders).
GHO has been issued on Ethereum since July 2023. On the Crypto Nation map, GHO stands in Ethereum City (the capital), because it was first issued on Ethereum; Aave’s governance token AAVE lives in the same city.
2. Borrow against collateral, mint GHO
New GHO appears when a user deposits assets such as ether (ETH) into Aave as collateral and borrows a smaller amount against it. If the collateral loses too much value it is sold off (liquidation), so more collateral should always back the GHO in circulation. The borrowing rate is set by DAO votes rather than the market, and the interest goes to the DAO treasury.
Only approved ‘facilitators’ can mint GHO, each within a DAO-set limit: mainly Aave’s Ethereum lending market, plus a flash-loan module and the GHO Stability Module (GSM), which swaps GHO for USDC or USDT at nearly one-to-one to help hold the price. Savings GHO (sGHO), a newer product, pays holders rewards that follow governance settings and are not guaranteed.
3. Where it is used
Users receive GHO when they borrow from Aave, and it is traded or deposited on decentralized exchanges and other DeFi (finance run by code instead of banks) services. Because Aave runs lending markets on many networks, GHO has spread beyond Ethereum.
Key dates: Ethereum issuance began in July 2023, Arbitrum followed in July 2024, and sGHO now runs as a savings product. Most GHO is created through Aave loans, so its supply tends to follow activity in Aave’s own markets.
4. Things to know
GHO relies on overcollateralization and liquidation, but a sudden collapse in collateral prices or faulty price data (oracles) could leave loans short of backing, and smart-contract bugs are always possible. The GSM leans on USDC and USDT, so trouble at those issuers could spill over. In its first months GHO traded below one dollar for a while: the peg is a goal, not a guarantee.
Rates, limits and accepted collateral can change with DAO votes. Stablecoin rules are still being written in many countries (the United States passed the GENIUS Act in July 2025), and it is unclear how decentralized issuers such as a DAO will be treated.
Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.