AAVE assumes the responsibility for GHO despite centralization skepticism: decentralized approach for stablecoin management

AAVE assumes the responsibility for GHO despite centralization skepticism: decentralized approach for stablecoin management

Despite the centralization: AAVE takes responsibility for GHO

The market of the stable coins is usually dominated by centralized approaches such as Tether (USDT). However, Aavedao has decided to work with a different approach and to take over the edition and management of GHO. Aavedao is a decentralized autonomous organization. Stani Kulechov, founder and CEO of AAVE, has confirmed that community members, including security experts, developers and other contributors, are received part of the income generated by GHO

In order to ensure transparency and accountability, AAVE has implemented self-management smart contracts to control all GHO transactions. This will be verifiable all transaction data, reserves and essential information about stable coins on the chain. This illustrates the commitment of the project for operational transparency.

After we have looked at the centralized priority of the stable coins, it is important that decentralized stable coins gain in importance. An example of this is the collapse of VAT, an algorithmic stable coin project from Terra, last year. This shows that so-called decentralized stable coins are not completely protected against risks such as manipulation and de-pegging.

In contrast, Markerdaos Dai, the world's largest algorithmic stable coin with a market capitalization of 4.27 billion US dollars, a de-pegging event in March and showed his resistance despite the challenges on the market.

It remains to be seen how the market of decentralized stable coins will develop. However, the assumption of responsibility for GHO by AAVE shows that interest in decentralized approaches is growing and that projects such as Avedao are striving to offer users a transparent and comprehensible solution.