The GHO stablecoin has been deployed on the Arbitrum network following a vote by the Aave Decentralized Autonomous Organization (DAO), a member-governed community that proposes and governs changes to the lending protocol.
Aave’s DAO also plans to launch the GHO stablecoin on multiple networks over time, but has decided to deploy GHO on Arbitrum to take advantage of the lower transaction costs and increased throughput of a second-layer network.
The decision to gradually roll out the stablecoin to additional networks was driven by security and risk management factors. This allowed the DAO to test GHO’s presence before expanding it to other blockchain ecosystems.
Chainlink’s CCIP Makes Multi-Chain GHO Possible
Chainlink’s CCIP protocol is an interoperability layer that will allow the Aave DAO to migrate the GHO stablecoin, initially launched on the Ethereum network, to Arbitrum and other networks in the future.
Stablecoin interoperability is achieved through two mechanisms: the burn-mint model and the lock-unlock function. The lock-unlock function locks or burns GHO tokens on the initial source chain and then unlocks them on the new chain.
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When the GHO stablecoin is bridged from the Ethereum network to another blockchain, the GHO tokens are locked in a smart contract known as the “Vault Contract” on Ethereum and minted by an intermediary on the target blockchain.
When GHO is bridged from another blockchain network to the Ethereum network, the GHO tokens on the alternate chain will be burned and an equal amount will be released from the Vault Contract on the Ethereum blockchain network.
If neither chain is Ethereum, the facilitator burns GHO tokens on the first chain and mints new tokens on the second chain.
Chainlink and Arbitrum: A Growing Partnership
The relationship between Chainlink and Arbitrum began in 2020 and has since evolved into a collaborative partnership to facilitate cross-chain development of decentralized applications.
Since then, Chainlink has established itself as one of the leading blockchain interoperability and oracle networks, conducting experimental pilots to move value between global institutions and blockchains, such as the SWIFT interbank messaging system.
Building on this momentum, Chainlink’s CCIP continued to see increased usage and adoption in 2024, with cumulative revenue from network fees growing to $377,724 in March, driven primarily by Arbitrum’s activity.
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