Aave launches GHO stablecoin on Ethereum testnet as token checks the bears
- GHO, the Aave decentralized stablecoin was deployed on the Ethereum Testnet.
- The AAVE price action got closer to bearish sentiment.
Decentralized lending project Aave has launched its stablecoin GHO on Ethereum’s [ETH] testnet according to an official tweet on 9 February. The project had been working on the stablecoin since last year after it got a go-ahead from its community.
It’s GHO time! @GHOAave is now on Ethereum’s Goerli Testnet!
👻 https://t.co/cM58b6qSBa pic.twitter.com/xueGERoqnw
— Aave (@AaveAave) February 9, 2023
Realistic or not, here’s AAVE’s market cap in MKR’s terms
Disruption in the DeFi space
As Aave’s official stablecoin, GHO would maintain a stable value while being minted and burned by facilitators. Also, the stablecoin would function in the Aave V3 Ethereum pool by providing help with collateral asset and interest rates.
The deployment on the testnet means that the stablecoin competition in the DeFi ecosystem has now heightened.
In the space, MakerDAO [MKR] has the most popular stablecoin DAI. Additionally, Tron’s [TRX] sojourn into the sector also helped it create USDD even though that has lost its dollar peg multiple times.
However, MKR still led Aave in terms of the Total Value Locked [TVL] at press time.
At the time of writing, the MakerDAO TVL was $7.05 billion while Aave was fourth at $4.45 billion. But the growth of both protocols in the last 30 days was close. It was also a similar pattern with the performance in the last 24 hours— around a 4% decline.
Further, Aave shared some other developmental updates regarding the GHO stablecoin deployment. With respect to future arrangements, Aave noted that a proposal highlighting GHO’s borrow and discount rate would be shared with its community.
In addition, key contributors to the project would develop a framework to onboard new facilitators. The updated testnet release stated,
“Following this development update there will be an ARFC, and a period of community discussion centered around the Ethereum V3 Market Facilitator and the Flashmint Facilitator.”
AAVE price down
Regarding its price action, the AAVE price fell in the last 24 hours to $79.229. However, the protocol’s volume increased within the same period.
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According to Santiment, the 24-hour on-chain volume spiked to 200.26 million. This implied that a lot of transactions had passed through the Aave network since the announcement.
As per the four-hour chart, the Moving Average Convergence Divergence (MACD) showed that AAVE’s momentum was solidly bearish. This was because the blue and orange dynamic lines were below the zero histogram level.
Moreso, the highest expectation for AAVE in the short term could be consolidation due to the Directional Movement Index (DMI) trend.
At press time, the +DMI (green) was 19.31 while the -DMI (red) was 28.24. With the Average Directional Index (ADX) staying neutral, AAVE could range around $75 to $80 in the short term.