[GHO]

GHO

Grade
D
Date of Rating:
August 30th, 2023
Last Change:
-
SMIDGE Scores
[S] Stability
[M] Management
[I] Implementation
[D] Decentralization
[G] Governance
[E] Externals
[S]
0.58
[M]
1.00
[I]
N/A
[D]
0.76
[G]
0.70
[E]
N/A
GHO Price
Last Update:
21/05/2024 08:59:35
$0.999254
Market Cap
$59,362,417
24h Volume
$3,761,709
Collater­alization
295%
Type of Peg
Fixed - To Fiat
Type of Backing
Crypto
Stables
Data provided by Coingecko
SMIDGE Scores
[S] Stability
[M] Management
[I] Implementation
[D] Decentralization
[G] Governance
[E] Externals
[S]
0.58
[M]
1.00
[I]
N/A
[D]
0.76
[G]
0.70
[E]
N/A
Core Team
  • Stani Kulechov

Native Chains
  • Ethereum

[S]
[M]
[I]
[D]
[G]
[E]
0.58
1.00
0.00
0.76
0.70
0.00
GHO
D
  • GHO is a new USD-pegged stablecoin launched in July 2023 by Aave, a leading money-market protocol on Ethereum, and is fully governed by the Aave DAO.

  • It is a CDP-style stablecoin that can be minted (borrowed) against collateral supplied into the Aave app.

  • Since its launch, GHO has been consistently trading around $0.97-0.985. A reclaim of GHO’s peg seems unlikely in the short term due to: (i) lack of strong stability mechanisms to enforce a $1 peg (ii) a low cost of borrowing GHO that incentivizes supply increases and (iii) anticipated sell pressure on GHO arising from a leveraged-yield strategy enabled by the onboarding of sDAI as collateral on Aave v3.

  • While GHO has low Management, Decentralization and Governance risks, it does not meet the minimum standard for Stability. GHO holders are exposed to significant price and liquidity risks. Due to low borrowing rates and no reserve redemption mechanism, GHO’s price is more likely to drop further than increase.

  • GHO, in its current form, is unsafe. We caution users against holding GHO.

Despite our rating, we believe GHO already has many key ingredients in place to become a safe, decentralized stablecoin, provided that it implements stability-enhancing changes to its design.

GHO's rating can be improved to a B+/B by:

  • enabling redemption of GHO for collateral or

  • enabling GHO as a collateral asset with high LTV.

GHO
Stability
Unstable
0.58/1
Unstable

The Stability factor is evaluated on the following:

1. Reserves Management - Quality, quantity, storage and segregation of reserve assets

2. Market Feedback - Indicators of market's confidence in a stablecoin derived from price and trade data

3. Mechanism - Stabilization methods that protect the stablecoin

GHO
Management
Very Low Risk
1.00/1
Very Low Risk

The Management factor is evaluated on the following:

1. Restrictions - What deterrents exist to prevent key personnel of stablecoin projects from unethical and illegal behavior?

2. Negative Track Record - Have key personnel been involved in scams, frauds or other illegal activities?

GHO
Implementation
Not Assessed
N/A
Not Assessed

This factor aims to assess risks arising from technical implementations – i.e, smart contract code and oracles. It is currently not assessed, but we plan for it to be evaluated in the future.

GHO
Decentralization
Low Risk
0.76/1
Low Risk

The Decentralization factor is evaluated on the following:

1. Platform Censorship Risk

2. Custodian Risk

3. Type of Collateral

4. Diversified Voting Power

5. User Censorship Risk

GHO
Governance
Low Risk
0.70/1
Low Risk

The Governance factor for on-chain stablecoins is evaluated on the following:

1. Voting Systems - Does the governance function have binding votes and automated on-chain execution of proposal outcomes?

2. Anti-Governance Attack Measures - Are there appropriate preventive and reactive measures to counter governance attacks?

GHO
Externals
Not Assessed
N/A
Not Assessed

This factor seeks to incorporate external feedback mechanisms such as market and social sentiment into our internal ratings. It is currently not assessed, but we plan for it to be evaluated in the future.