GHO, the stablecoin of DeFi lending platform Aave, has been trading below $1 since its launch over the summer.
DeFi developer TokenBrice said that the small-scale experimental phase of GHO has ended and it is time to increase the price. TokenBrice hinted that it will mobilize numerous resources within a few weeks, with the goal of raising the GHO price to $0.985 by November 30.
TokenBrice and others stated that GHO’s relatively low borrowing costs also contributed to the token falling below $1. Prior to Wednesday, GHO’s interest rate was 3%, making borrowing GHO cheaper than borrowing other stablecoins such as Maker’s DAI.
TokenBrice also blamed GHO’s decoupling on a lack of “utility.” Unlike other stablecoins, GHO offers its holders few opportunities to earn money from the tokens.
Aave founder Stani Kuchelov said that simply put, Aave DAO chose growth as a market entry strategy, and now the focus has turned to the pegged exchange rate.
GHO is minted when Aave users borrow GHO with cryptographic collateral worth more than the GHO they borrowed. As of press time, the number of GHO tokens in circulation exceeds 32 million.