You hold crypto you plan to keep, and you need dollars on-chain to pay for something, open a trade, or settle a debt. Selling ends your exposure and can lock in a loss at a bad moment. A crypto-backed stablecoin lets you borrow a dollar token against those holdings while keeping them as collateral.
GHO, pronounced go, is the dollar stablecoin issued inside the Aave lending protocol, so its loans, collateral rules, and interest rate all answer to Aave governance. The way a GHO loan works changed in July 2025. That change decides how much GHO you can borrow, what you pay, and what a borrow does to total supply.
What is GHO?
GHO is an overcollateralized stablecoin native to the Aave Protocol, built to hold a value pegged to the US dollar. The collateral behind it is worth more than the GHO issued, which leaves a buffer if collateral prices fall. Aave Governance controls its interest rate and collateral requirements (source: Aave Help, GHO Stablecoin).
Most GHO comes from loans. In August 2026, debt drawn on Aave's Core, Prime and Horizon markets on Ethereum made up roughly 69% of issuance, and stablecoins such as USDT swapped into GHO Stability Modules made up the other 31%. The usual example is a loan against collateral you supply on Core, the protocol's main lending market on Ethereum. Aave markets on other networks such as Base and Arbitrum carry GHO deployments of their own (source: TokenLogic, GHO Stewards August 2026). Whichever route you take, the GHO you receive is an ordinary token in your wallet that you can hold, send, or spend.
That backing places GHO among the crypto-backed stablecoins, where loans secured by crypto worth more than the dollars issued keep the token backed. Liquidation sells collateral when one of those loans gets too close to its limit. Because it was issued on Ethereum first, GHO also sits beside the other stablecoins on Ethereum in most wallets and decentralized finance apps.
GHO went live on Ethereum mainnet in July 2023. In that launch design, you created new GHO each time you borrowed it against crypto supplied on the Aave V3 Ethereum market (source: Decrypt, Aave's GHO Stablecoin Hits $2.5M Market Cap). The design ended on July 2, 2025, when Aave governance executed proposal 334, the upgrade to Aave v3.4. The upgrade retired the old facilitator and moved GHO on Core to a supply that is pre-minted into the pool, ending minting on demand (source: Aave Governance, AIP 334).
Interest paid on Core GHO loans goes to the Aave DAO (decentralized autonomous organization) treasury. The Core GHO reserve has a 100% reserve factor, which is the share of borrow interest the protocol keeps for itself (source: TokenLogic, GHO Stewards August 2026). Suppose you borrow 1,000 GHO on Core at 4.25%, the rate it carried in mid-September 2026 (source: TokenLogic, GHO Stewards September 2026). Held for a year at that rate, the loan builds up about 42.50 GHO of interest before compounding. Under the 100% reserve factor, every unit of that interest goes to the DAO treasury.
How borrowing GHO works on Aave Core
Borrowing GHO on Aave Core draws from GHO that is already in the pool. A facilitator contract called a GhoDirectMinter mints GHO ahead of demand and supplies it to the Core market. GHO there now works like every other token listed on Aave (source: Aave v3.4 features, GitHub).
The steps match any other Aave loan. You supply collateral on Aave, keep it switched on as collateral, and then borrow GHO against it up to the limit your collateral allows. Suppose the Core pool holds 20 million GHO that nobody has borrowed yet and you borrow 2,000 GHO. The pool's available GHO drops to 19,998,000, and your debt starts at 2,000 GHO and grows with interest from that moment. The number of GHO tokens in existence stays exactly where it was before you signed.
Repaying sends GHO back into the pool, which shrinks your debt, lifts your health factor, and makes that GHO available to the next borrower. Sending GHO to another wallet is a plain token transfer. The loan and its interest stay on your Aave account until you repay through the protocol, even after the tokens have left your hands.
Besides your own collateral, two limits decide whether a new GHO loan goes through. The first is the reserve's borrow cap, the most GHO that can be on loan from the Core market at once. The second is the GHO the minter has supplied that borrowers have not yet taken. The minter can only add or remove GHO that is available in the pool. The facilitator's capacity and the borrow cap set the most the reserve can lend (source: Aave, GhoDirectMinter README).
The Core borrow rate is static, which means it does not follow utilization, the share of a pool that is lent out. Governance and the GHO Stewards change it by decision. Only the minter can supply GHO to the Core pool (source: BGD Labs, ARFC v3.4). Following the stewards' latest changes, Core priced GHO debt at 4.25% in mid-September 2026 (source: TokenLogic, GHO Stewards September 2026).
GHO facilitators and capacity
A facilitator is a contract that Aave governance approves to mint and burn GHO. Its capacity is the most GHO it may mint. Its level is the GHO it has outstanding right now (source: TokenLogic, RemoteGSM Upgrade). The gap between the two is how much more GHO that facilitator could still issue.
After the v3.4 and RemoteGSM upgrades, the facilitators that serve Aave markets mint GHO into those markets in advance. One GhoDirectFacilitator for each network's modules mints into a reserve that serves them (source: TokenLogic, RemoteGSM Upgrade). For a borrower, unused capacity is GHO that does not exist yet. On Core, only the GHO the minter has already supplied can be lent out. Total supply moves when the minter mints into the pool or withdraws GHO and burns it (source: Aave, GhoDirectMinter README).
Four kinds of facilitator issue GHO on Ethereum today, each sending the GHO it mints to a different place.
| Facilitator | Where its GHO goes | What changes GHO's total supply |
|---|---|---|
| Core GhoDirectMinter | Supplied to the Aave V3 Ethereum Core market | Minting into the pool, or withdrawing and burning from it |
| Prime and Horizon minters | Supplied to the Prime and Horizon markets on Ethereum | The same mint-and-supply and withdraw-and-burn steps |
| GhoDirectFacilitator | Minted into a GhoReserve that serves the Stability Modules | Minting into, or burning from, the reserve |
| FlashMinter | Lent and returned inside a single transaction | Nothing once the transaction ends |
The DAO supplies most of the Prime and Horizon markets through their facilitators (source: TokenLogic, GHO Stewards August 2026). Flash minting matters less than it used to. Since the v3.4 upgrade, GHO can be flash-loaned from the pool like any other asset, which in most cases makes the separate flash mint unnecessary (source: Aave v3.4 features, GitHub).
Minting into the Core pool is permissioned. The minter's owner, expected to be the governance short executor, can call its mint-and-supply and withdraw-and-burn functions. The contract also lets the owner share those rights with another party such as the GHO Stewards (source: Aave, GhoDirectMinter README). The stewards are the group that governance authorizes to adjust GHO parameters day to day inside limits it sets (source: TokenLogic, RemoteGSM Upgrade).
Collateral, health factor, and the GHO peg
A GHO loan uses the same health factor as any other Aave borrow, and a reading below 1 opens the position to liquidation. Extra collateral is the buffer that keeps GHO backed when prices fall, while the peg is the one US dollar GHO is designed to hold, a value that market prices can drift away from.
Your buffer is the gap between what your collateral counts for and the GHO you owe, and it shrinks when the collateral asset sells off. Suppose you supply ETH worth $10,000, the liquidation threshold on that ETH is 80%, and you borrow 6,000 GHO against it. Your health factor is then 1.333 (source: Aave Help, Health Factor and Liquidations).
health factor = (10,000 x 0.80) / 6,000 = 1.333
At 1.333, your health factor sits a third above 1. If ETH falls or interest adds to the GHO debt, the number moves toward 1. Below 1, any network participant can repay part of your GHO debt and receive collateral of equal value plus a liquidation bonus. To raise the number, you supply more collateral or repay part of the loan (source: Aave Help, Health Factor and Liquidations). The same Aave health factor and liquidation rules apply to GHO debt as to a USDC loan, so a GHO borrow carries no special protection when the market drops.
The peg works on a different level from your account. Your health factor protects the protocol against your loan going bad, while the peg depends on whether people want to hold GHO at a dollar. When GHO trades below a dollar, a higher borrow rate helps lift the price. Borrowers who repay buy GHO in the market below par to do it. Each repayment also reduces circulating supply (source: TokenLogic, GHO Stewards August 2026).
A second force comes from the Stability Module. When GHO is below its peg, traders buy it at a discount and redeem it in the module for USDC or USDT. That arbitrage creates a hard band around the peg whose width is set by the swap fee (source: TokenLogic, RemoteGSM Upgrade). Inside that band, a small discount is ordinary market movement, while a discount far wider than the fee would tell you that one of those forces had stopped working.
How GHO stability swaps work
With the GHO Stability Module, you can swap GHO against other stablecoins that governance has accepted at a set ratio. Its first price strategy is a fixed 1:1. Governance can later move the module to a dynamic strategy (source: Aave Help, Stability Module).
The module changed by March 2026. Each module used to be its own facilitator that minted and burned GHO directly. The RemoteGSM upgrade, activated through proposals 452 and 453, replaced that design with one GhoDirectFacilitator per network, which mints GHO into a shared GhoReserve. A module now draws GHO from that reserve when you swap in and returns it there when you swap out. Each module also keeps its own exposure cap, the most of one stablecoin it will hold (source: TokenLogic, RemoteGSM Upgrade).
Work through a swap with round numbers. You send 1,000 USDC to the Ethereum USDC module while it is under its exposure cap. You receive 1,000 GHO from the reserve. Each module charges whatever fees governance sets: a mint fee for swapping in and a redemption fee for swapping out. In September 2026 the mint fee on the USDC modules stood at zero. The same steward update raised their redemption fee from 10 to 15 bps, to be applied through the GHO Risk Council. At 15 bps, swapping the 1,000 GHO back would leave you 998.50 USDC (source: TokenLogic, GHO Stewards September 2026).
A swap and a loan affect your account in different ways. In a swap you exchange one stablecoin for another and owe nothing afterward, so there is no health factor to watch and no interest to pay. In a loan you keep your collateral and take on GHO debt with a health factor. Both raise or lower the GHO circulating in the market. Neither changes total supply, which moves only when a facilitator mints into or burns from its market or reserve.
The 1:1 ratio is the module's price, and the market price is a separate number. A module that has run out of USDC cannot redeem GHO for USDC, and a module at its exposure cap stops taking new USDC. Check the module's remaining capacity and current fees in the Aave app before you rely on it for a large trade.
GHO, USDT, and USDC on the Aave side
On Aave Core, GHO now sits in a pool the way USDT and USDC do, but each pool is filled differently. GHO comes only from the protocol's own minter and carries a static rate that governance sets. USDT and USDC come from users who deposit tokens they already hold, and they earn a rate that moves with demand.
Meet the same $2,000 need three ways and the differences become concrete. Borrowing 2,000 GHO draws from the minter's supply at the static rate and puts a GHO debt and a health factor on your account. Borrowing 2,000 USDC draws tokens that other users supplied. Its rate rises with the utilization rate, which is the share of supplied liquidity that is borrowed (source: Aave Docs, Liquidity Pool). A swap of 2,000 USDC into GHO through the Stability Module creates no debt at all, but you give up the USDC to hold the GHO.
| Question | GHO on Aave Core | USDT or USDC on Aave Core |
|---|---|---|
| Who supplies the pool? | Only the protocol's GhoDirectMinter | Users who deposit their own tokens |
| How is the borrow rate set? | Static, changed by governance and the GHO Stewards | Moves with utilization |
| What limits a new loan? | The borrow cap and the GHO the minter has supplied | The borrow cap and the tokens users have supplied |
For a borrower, the practical test is today's rate and whether the pool has GHO available to borrow. Because the GHO rate stays put while USDC and USDT rates climb with demand, GHO, USDT, and USDC on Aave can trade places as the cheapest loan from one month to the next. Whichever you pick, your collateral stays exposed to the market.
GHO and the AAVE token share a brand and little else. AAVE is the protocol's governance token, whose holders voted on proposals such as the v3.4 upgrade, and no GHO loan or swap creates it. If what you want is a position in AAVE itself, another way to get it is AAVE/USDT Spot or the AAVEUSDT Perpetual on BloFin, where you trade the governance token's price without opening a loan.
Check the maker and taker rates on the BloFin fee schedule before you size a trade on either AAVE market. That way the trading fee on BloFin sits next to the cost of any Aave loan you run alongside it.
After you hold GHO
Once GHO is in your wallet, you can repay the Aave loan it came from, bridge it to another supported network, or deposit it into sGHO, Aave's savings vault for GHO. Idle GHO earns nothing, and users cannot supply GHO to the Core market because its supply cap blocks deposits.
That cap exists to stop users from supplying GHO by accident, since a GHO deposit on Core would count as no collateral and earn nothing under the 100% reserve factor (source: Aave v3.4 features, GitHub). After a full repayment, withdrawing your collateral works only while the market holds enough unborrowed liquidity (source: Aave Docs, Liquidity Pool).
Bridging moves GHO between Ethereum and supported networks such as Arbitrum through Chainlink CCIP, the Cross-Chain Interoperability Protocol. Tokens are locked on Ethereum while an equal amount is minted on the destination network. That keeps total supply constant across the transfer (source: Aave Help, Bridging GHO).
To earn on GHO, deposit it into the sGHO savings vault, which pays the Aave Savings Rate (ASR) set through the GHO Risk Council. The ASR rose to 4.50% in the August 2026 steward update (source: TokenLogic, GHO Stewards August 2026).
A short checklist keeps the next steps in order:
- Treat GHO you borrowed and the Aave debt behind it as one position, wherever the tokens go.
- Repay GHO or supply more collateral before you move the tokens elsewhere when your health factor is thin.
- Use the CCIP bridge in the Aave app when you need GHO on another supported network.
- Deposit into sGHO when you want the savings rate, because a wallet balance earns nothing.
Looking to trade AAVE tokens on BloFin? To get started, you'll need to first create a BloFin account, fund your account with cryptocurrency, then open the AAVE/USDT Spot trading page or the AAVEUSDT Perpetual page.
Frequently asked questions
Is GHO the same as the AAVE token?
GHO is Aave's dollar stablecoin, while AAVE is the governance token whose holders vote on Aave proposals, including the rates and limits that apply to GHO. The two share a brand and an ecosystem, but they behave differently: GHO aims to stay near one US dollar, while the AAVE price floats with the market. Holding GHO gives you no vote, and holding AAVE does not repay a GHO loan unless you sell it and use the proceeds to buy GHO for the repayment.
Why does GHO sometimes trade below one dollar?
GHO slips below a dollar when more holders sell it than buy it, often because it is the cheapest stablecoin to borrow on Aave (source: TokenLogic, GHO Stewards August 2026). Over the 30 days to September 14, 2026, GHO traded between 6.7 and 13.6 bps under par. The stewards tied the discount to borrowers on the Horizon market who took cheap GHO loans and sold the GHO to buy more collateral. Their response was a 25 bps rise in the Horizon base rate and new Stability Module fees (source: TokenLogic, GHO Stewards September 2026).
Does bridging GHO to another network create new GHO?
Bridging GHO burns or locks it on one network and mints or unlocks the same amount on the other, so every unit that appears on one network is matched by a unit locked or burned on another. Transfers between two networks other than Ethereum use a burn-and-mint model, still backed by reserves on Ethereum (source: Aave Help, Bridging GHO). New supply for a network arrives differently: GHO is first minted on Ethereum and then bridged by governance, which makes every expansion of GHO onto a new network a DAO decision (source: TokenLogic, RemoteGSM Upgrade).
Does buying AAVE on BloFin give you GHO?
A spot or perpetual order for AAVE on BloFin trades the AAVE token's price on the exchange's order book, and it has no connection to Aave's lending pools. To get GHO, you borrow it on Aave from a self-custody wallet, swap a stablecoin for it in the Stability Module, or buy it from someone who already holds it. A BloFin fill also cannot open, repay, or liquidate a GHO loan, because that loan lives in Aave's smart contracts and your exchange account holds only exchange balances.
Does staking AAVE still lower the GHO borrow rate?
Staking AAVE stopped lowering the cost of GHO loans when the v3.4 upgrade executed. Before it, holders of stkAAVE, the staked form of AAVE, received a discount on their GHO debt. The upgrade dropped it because only a very small group of borrowers ever used it (source: Aave v3.4 features, GitHub). The design team pointed to anti-GHO as the replacement, a reward stakers could use to repay GHO debt, and stated that it would not launch in step with the upgrade (source: BGD Labs, ARFC v3.4).
Can you borrow GHO outside the Aave Core market?
Prime and Horizon are the two other Aave markets on Ethereum that lend GHO, and each one prices GHO its own way. In mid-September 2026, Prime charged 3.84% and Horizon charged 3.00% on a flat curve. The stewards then proposed raising Horizon's base rate to 3.25%, because cheap Horizon loans were feeding GHO sales (source: TokenLogic, GHO Stewards September 2026). Prime's rate sits on a curve that moves with utilization. Beyond Ethereum, GHO deployments on networks such as Gnosis and Mantle set their own borrow rates (source: TokenLogic, GHO Stewards August 2026).
Researched and written by the BloFin Academy editorial team with AI-assisted drafting. Primary sources include Aave Help on GHO, the Stability Module, bridging, and liquidations, the Aave Docs liquidity pool page, Aave governance proposal 334 and the BGD Labs v3.4 design notes and forum proposal, the GhoDirectMinter README, TokenLogic's RemoteGSM post and its GHO Steward updates for August and September 2026, and Decrypt's report on the GHO launch. All facts independently verified against cited documentation current as of October 2026.
This article is for informational and educational purposes only. It is not financial, investment, trading, or legal advice. Cryptocurrency can lose value. Borrowing on Aave can lead to liquidation if the health factor drops below 1. Spot AAVE/USDT buys the token. An AAVEUSDT Perpetual is a contract on the price. Do your own research. Consider your circumstances before using any protocol or trading any asset.