GHO (GHO)

What GHO is

GHO is a stablecoin issued by the Aave protocol against collateral that borrowers deposit there. Aave's documentation defines it directly: "GHO (pronounced "go") is a decentralised, over-collateralised stablecoin that is fully backed, transparent, and native to the Aave Protocol," maintaining a US dollar peg through "market efficiencies and over-collateralisation mechanisms inherent in the Aave Protocol" (source: Aave documentation, read September 2026).

The category matters. GHO is not a fiat backed stablecoin holding dollars in a bank, and it is not an algorithmic stablecoin balancing two tokens against each other. It is a crypto backed stablecoin: every GHO in existence was minted against crypto collateral worth more than the GHO itself, inside a lending protocol that already knew how to value and liquidate that collateral.

For where GHO trades and what buying or minting it involves from your country or state, see where to buy GHO and the venues at Exchanges.

How it works

GHO is minted, not supplied. That single sentence from Aave's own documentation explains most of the design: "GHO is minted, not supplied, therefore interest rate and available liquidity calculations are based on custom interest rate strategy and facilitator caps respectively" (source: Aave documentation, September 2026).

On an ordinary Aave market, a borrower draws from a pool that other users deposited, and the interest rate rises with utilization because the pool can run dry. GHO has no pool. When a user borrows GHO, the token is created at that moment, and when the debt is repaid the token is destroyed. There is no depositor to run out, so utilization does not set the rate. Instead the rate is set by a custom strategy that Aave governance controls, which means GHO's borrowing cost is a governance decision rather than a market outcome.

Issuance capacity is controlled by facilitators. Aave's documentation states that "Facilitators are contract addresses approved by Aave Governance with the FACILITATOR_MANAGER_ROLE and BUCKET_MANAGER_ROLE, giving them the ability to mint and burn GHO tokens," and that "Each facilitator operates under a specific bucketCapacity, controlling the maximum amount of GHO they can generate" (source: Aave documentation, September 2026).

The interface is deliberately small. A facilitator calls mint(address account, uint256 amount), where the amount "must be greater than 0, and the new bucketLevel (current bucketLevel + amount) must not exceed the facilitator's bucketCapacity," and calls burn(uint256 amount) to destroy GHO from its own balance (source: Aave documentation, September 2026).

That bucket model is the supply ceiling and the risk control at the same time. Each approved minter has a hard cap it cannot exceed, so a bug or a governance error in one facilitator is bounded by that facilitator's bucket rather than by the whole system's collateral. Adding a new issuance route means approving a new facilitator with its own bucket, which is a governance vote rather than a code change.

Supply and tokenomics

GHO has no fixed supply and no emission schedule. Outstanding GHO is simply the sum of what borrowers have minted and not yet repaid, bounded above by the total of every facilitator's bucket capacity. That upper bound is a governance-set number, which makes GHO's maximum possible supply a decision rather than a constant.

History

GHO is the second act of a lending protocol, and understanding it that way explains the design choices. Aave spent years building the machinery a stablecoin issuer needs: collateral valuation through oracle feeds, a liquidation system with incentivized liquidators, risk parameters per asset, and an on-chain governance process to change them. Issuing a stablecoin reuses all of it rather than rebuilding it.

The facilitator abstraction is what generalizes that. The obvious first facilitator is the Aave market itself, where a borrower mints GHO against deposited collateral. But because a facilitator is just an approved contract with a bucket, governance can add other issuance routes with different collateral or different terms without redesigning the token. That is a deliberately extensible architecture, and it puts the risk decision squarely with voters.

Aave has also built a savings product on top of GHO, and the protocol's safety module was reworked into a system called Umbrella in which staked assets can be burned to cover a deficit. Those sit outside the GHO token contract itself and are governed separately.

Risks and what to watch

Collateral quality is the underlying question. GHO is only as sound as the assets backing the debt that created it, valued by oracle feeds that can be stale or manipulated. A sharp fall in a widely used collateral asset is the scenario that tests the liquidation system.

Governance is a first-order dependency, more so than for most stablecoins. Bucket capacities, which facilitators are approved, and the borrow rate itself are all decided by AAVE holders. A stablecoin whose issuance ceiling and cost of carry are voted on is exposed to whoever holds the votes.

Facilitator concentration is worth checking directly. The bucket model bounds each minter's exposure, but if one facilitator holds most of the total capacity the bounding does less work than it appears to.

Finally, a depeg in either direction is possible and has to be understood as normal for this design. GHO trading below a dollar makes repaying debt cheap, which is the arbitrage that pulls it back; whether that arbitrage is strong enough depends on liquidity and on borrower behaviour, neither of which the protocol controls.

Frequently asked questions

What backs GHO?

Crypto collateral deposited in the Aave protocol. Aave describes GHO as decentralised, over-collateralised and fully backed, with the peg maintained through market efficiencies and over-collateralisation rather than through a dollar reserve.

Where does GHO come from?

It is minted on demand. Aave's documentation states that GHO is minted rather than supplied, created when a user borrows and destroyed when the debt is repaid.

What is a facilitator?

A contract address approved by Aave Governance with the facilitator manager and bucket manager roles, permitted to mint and burn GHO up to a specific bucketCapacity.

How is GHO's interest rate set?

Not by pool utilization. Aave states that GHO's interest rate calculations are based on a custom interest rate strategy, and its available liquidity on facilitator caps, which makes the rate a governance decision.

Where can you buy GHO?

Availability depends on your country or US state. See where to buy GHO for the venues serving your jurisdiction, and Exchanges to compare fees and kyc requirements.