The Aave protocol GHO stablecoin is now live on Arbitrum
The GHO stablecoin has been deployed on the Arbitrum network following a vote from the Aave Decentralized Autonomous Organization (DAO), a member-controlled community (DAO) that proposes and manages changes to the lending protocol.
Aave's DAO also plans to launch the GHO stablecoin on multiple networks over time, but chose to deploy GHO on Arbitrum to take advantage of the layer-2 network's lower transaction costs and increased resources.
The decision to release a stablecoin to additional networks in phases is based on security and risk management factors. This allowed The DAO to test the waters before expanding GHO's presence to other blockchain ecosystems.
Chainlink CCIP makes multi-chain GHO possible
Chainlink's CCIP protocol is the interoperability layer that allows Ave Dao, the GHO stablecoin originally launched on the Ethereum network, to migrate to Arbitrum and to other networks in the future.
The two mechanisms of stablecoin interoperability known as the burn-and-mint model and the lock-and-release functionality of GHO tokens are locked or burned on the original source chain and then released on the new chain.
Related: Chainlink data streams live on the Avalanche Network
If the GHO stablecoins are linked to a separate blockchain from the Ethereum network, the GHO tokens are locked in a smart contract, known as a “Vault Contract”, which is coordinated on Ethereum and then on the target blockchain.
When GHO connects to the Ethereum network from another blockchain network, the GHO tokens on the alternative chain are burned and an equivalent amount is released from the Vault contract on the Ethereum blockchain network.
If both chains are not Ethereum, the moderator will burn the GHO tokens on the first chain and the new tokens on the second chain.
Chainlink and Arbitrum: A Growing Partnership
The relationship between Chainlink and Arbitrum began in 2020 and later evolved into a collaborative partnership to promote cross-chain development of decentralized applications.
Since then, Chainlink has established itself as one of the leading blockchain interoperability and word-of-mouth networks, conducting pilot programs to exchange value on the blockchain with international institutions such as the SWIFT interbank messaging system.
Building on this momentum, ChainLink's CCIP continues to see increased usage and adoption in 2024, with total revenue from network fees rising to $377,724 in March, primarily due to arbitrage activity.
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