Aave Proposal Introduces Yield
Aave DAO has recently proposed a series of governance proposals to promote the adoption of its native stablecoin GHO, including the introduction of the “sGHO” savings token. This product will allow users to earn yields by holding sGHO, providing a stable on-chain savings rate that will undoubtedly bring significant growth to the Aave ecosystem and further enhance GHO’s market position.
(Aave’s over-collateralized stablecoin GHO officially launched! Stakers can receive up to a 30% interest rate discount)
Aave Proposal to Launch sGHO Savings Product
The Aave community is actively promoting the growth of the GHO stablecoin and increasing its adoption through governance proposals. The Aave DAO is currently considering the launch of “sGHO,” a low-risk savings product.
As a major lending protocol on Ethereum, Aave plans to enable GHO holders to earn yields through sGHO and introduce the “Aave Savings Rate (ASR)” to attract more users. This aligns with the current trend in the stablecoin market, where many are actively exploring new application scenarios, particularly yield-generating stablecoins, such as MakerDAO (now Sky)’s USDS and Binance’s own BFUSD.
(Tether’s former CEO joins the fray! Launches yield-generating stablecoin protocol Pi Protocol and stablecoin USP)
How Will sGHO Drive GHO Growth?
According to a recent “temp check” governance proposal from the Aave community, GHO stablecoin has experienced rapid growth and has now become the 20th largest stablecoin by market capitalization as of 2025. However, as its market cap grows from 200 million to 300 million or beyond, Aave requires new strategies to maintain its growth momentum.
The launch of sGHO is seen as a key initiative, expected to increase GHO’s market cap to between 300 million and 500 million.
Aave is proposing to create an sGHO savings product by introducing the Aave Savings Rate (ASR). sGHO is a new low-end risk profile savings product for earning yield on GHO based on the native Aave lending rate and incentivized rate collected partially from GHO borrowing revenue. No withdrawal…
— Stani.eth (@StaniKulechov) March 5, 2025
Aave founder Stani.eth further emphasized:
From a revenue perspective, every 100 million GHO generates revenue for Aave DAO equivalent to that generated by 1 billion USDC, significantly strengthening our stablecoin ecosystem.
(Aave Labs proposal to integrate BlackRock’s tokenized fund BUIDL to enhance GHO stability module efficiency)
Operation Mechanism and Revenue Sources of sGHO
The proposal submitted by Aave Chan indicates that sGHO aims to become a “low-risk savings product” providing stable yields to GHO holders. Its core mechanism is as follows:
– Revenue Sources: Primarily from the lending rates of the Aave protocol and a portion of the GHO lending income distribution.
– Deposits and Withdrawals: To lower the barrier to entry, sGHO does not charge deposit or withdrawal fees, making it more competitive.
– Risk Management: GHO deposited into sGHO will be locked within the contract and will not be rehypothecated to reduce risk.
– Yield Calculation: The savings rate of sGHO will be linked to the “USDC Native Yield” of Aave V3. Additionally, the interest rate of sGHO may be adjusted based on the holding scale, with yields potentially decreasing when the holdings are substantial. Aave is currently in a financially favorable position, allowing it to actively promote growth strategies. By offering more attractive rates than other similar savings products, sGHO is expected to achieve significant growth.
Aave’s Major Push to Promote GHO Adoption and Expand Multi-chain Applications
The launch of sGHO is part of Aave’s efforts to expand the GHO ecosystem. Just a few days ago, the community passed a proposal to introduce GHO as a gas token across different blockchains as part of Aave’s “GHO Cross-chain Strategy.”
Additionally, there are other proposals suggesting the expansion of GHO into ecosystems such as Fluid and Arbitrum to enhance GHO’s market liquidity. It is evident that Aave is actively promoting the growth and adoption of the GHO stablecoin through innovative products and ecosystem expansion. As the first yield-bearing stablecoin in the Aave ecosystem, sGHO will provide users with a stable on-chain yield rate and become an ideal choice for users entering the DeFi market, further enhancing its competitiveness and influence in the stablecoin market and the DeFi sector.
(Aave officially deploys Sonic and provides 15 million USD as liquidity support, with total on-chain locked value surpassing 17 billion USD)
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