Last July, DeFi protocol Aave launched its algorithmic U.S. dollar-pegged stablecoin, GHO, which surpassed $2.5 million market cap in two days and stands at over $89 million minted to date. In conversation with Chainlink Labs’ Halcyon Price during Devconnect Istanbul last November, Aave Founder Stani Kulechov elaborated on Aave’s vision for GHO’s cross-chain expansion and utility powered by Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
Today, the Aave DAO launched GHO on Arbitrum, the largest Ethereum layer-2 network with $17.7 billion in TVL, as the first phase of its CCIP-powered cross-chain expansion strategy. In an official announcement, Kulechov congratulated the Aave community on boosting GHO’s accessibility by extending its reach beyond Ethereum.
“Integrating with other networks will lower fees, offer faster transactions, and enhance liquidity, making GHO more attractive to users and ushering in a variety of new use cases, including GHO digital payments,” he said.
“We are excited to see that the Aave DAO has chosen Arbitrum as the first platform to launch its GHO stablecoin,” said Nina Rong, Head of Ecosystem Development at The Arbitrum Foundation, a neutral steward supporting the Arbitrum DAO. “This integration is poised to revolutionize accessibility, lower transaction costs, and unlock unprecedented liquidity. As decentralized finance continues to advance, we are looking forward to seeing more transformative new use cases across Arbitrum.”
The Aave DAO’s proposal for GHO’s cross-chain expansion includes plans to launch on additional networks with CCIP after rigorously evaluating its initial implementation on Arbitrum. As a universal blockchain abstraction layer, CCIP is compatible with Ethereum and non-Ethereum networks.
To facilitate secure cross-chain transfers between Ethereum and non-Ethereum networks like Arbitrum, GHO will utilize CCIP’s lock-and-mint model, which ensures the total token supply remains constant by locking tokens on one network while minting an equivalent amount on the other. In the future, transfers between non-Ethereum chains will use CCIP’s burn-and-mint model, which simultaneously burns a token on the source chain and mints the same token on the destination chain.
As the industry-standard decentralized computing platform, Chainlink has enabled over $12 trillion in transaction value and provides a comprehensive set of services, including CCIP, that are vital for creating, securing, and updating tokenized real-world assets and stablecoins throughout the growing multi-chain economy. Utilizing Chainlink’s time-tested oracle infrastructure, CCIP achieves the highest level of cross-chain security and features a separate Risk Management Network that independently monitors cross-chain functions for suspicious activity.
“I have always seen the developers of Aave prioritize security, thanks to their deep understanding of the dynamics around keeping user value secure,” said Chainlink co-founder Sergey Nazarov. “CCIP does provide a large improvement on the security of other cross-chain systems, which is what will come to define it as the leading cross-chain infrastructure, just like the security of Chainlink Data Feeds is what led them to become the leading source of data in DeFi.”