• At the time of publication, GHO was worth $0. 96.
• Aave undertook measures like hiking borrowing rates and launching GSM to correct the peg.

Stablecoins are seen as the oasis of stability in the turbulent world of cryptocurrencies. However, their utility lasts as long as they maintain their peg to the underlying asset, whether it is fiat currencies like the U.S. dollar (USD), or a crypto asset.

Read Aave’s [AAVE] Price Prediction 2023-24

According to a recent post by digital assets’ data provider Kaiko, lending protocol Aave’s [AAVE] stablecoin, GHO, has failed to reach the ideal $1 peg since its launch in mid-July. At the time of publication, the stablecoin was worth $0.96.

Not enough demand for GHO

The algorithmic stablecoin was launched on the Ethereum [ETH] blockchain, with Aave users getting the option to borrow it by depositing crypto collateral worth more than the GHO being borrowed.

The initial response was promising, and the stablecoin soared to a circulating supply of more than 21 million within a month of its launch, data from DeFiLlama revealed. The attractive lending rates of 1.5% played a major part in boosting GHO’s market cap.

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Author: Aniket Verma

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