Key Takeaways:
- Aave DAO approved native GHO deployment on Arbitrum on July 8
- GHO supply stands at roughly $185 million, trailing DAI and USDe
- Arbitrum holds over $3.5 billion in DeFi TVL across its ecosystem
Geri
Aave DAO approves GHO native deployment on Arbitrum
Aave DAO approved the native deployment of its GHO stablecoin on Arbitrum, giving the asset direct access to Ethereum's largest Layer 2 ecosystem by total value locked.
The proposal, authored by TokenLogic and passed by governance on July 8, authorizes GHO's native minting and burning on Arbitrum through the Cross-Chain Interoperability Protocol, or CCIP, according to governance documents. Previously, GHO existed primarily on Ethereum mainnet, limiting its distribution to users willing to bridge into the Aave ecosystem.
"Native deployment removes the friction of bridging and lets GHO compete for liquidity on Arbitrum's own terms," TokenLogic said in the proposal. "This is the first step toward GHO becoming a multi-chain stablecoin with organic demand across ecosystems."
GHO's total supply stood at roughly $185 million as of July 8, according to DefiLlama data, placing it behind DAI at $5.4 billion and USDe at $3.1 billion among decentralized stablecoins. The Arbitrum deployment targets one of the key reasons for that gap: distribution. Arbitrum hosts more than $3.5 billion in DeFi TVL across protocols including Uniswap, GMX, and Camelot, according to DefiLlama, giving GHO a pool of potential borrowers and liquidity providers that did not exist on Ethereum mainnet alone.
The deployment also comes as Aave expands its lending infrastructure across multiple chains. On July 2, Aave launched V3.7 on Monad, a high-throughput Layer 1 network, where its market surpassed $100 million in deposits within 48 hours, according to Aave app data. That launch included GHO as one of 12 supported assets, with the Monad Foundation committing $15 million in incentives over 12 months and agreeing to acquire and hold 10 million GHO for more than six months.
The Arbitrum deployment does not include a comparable incentive package, according to the governance proposal. Instead, it relies on native demand from Arbitrum's existing DeFi ecosystem, where users can borrow GHO against collateral or supply it to liquidity pools. The proposal also leaves the door open for future incentive programs, stating that "the DAO may consider targeted liquidity mining programs after observing organic usage patterns."
For GHO to close the gap with DAI and USDe, it needs both supply-side growth — more users minting GHO against collateral — and demand-side adoption across decentralized exchanges and lending markets. Arbitrum offers the largest single venue for both, with daily DEX volumes averaging $400 million to $600 million, according to DefiLlama data.
The next milestone for GHO's multi-chain strategy will be adoption on Arbitrum's native lending markets and DEXs. If GHO achieves meaningful velocity on Arbitrum — measured by borrowing volume and DEX trading pairs — the DAO could pursue additional Layer 2 deployments on Base, Optimism, or zkSync, according to the proposal's stated roadmap.
This article is for informational purposes only and does not constitute investment advice.
[1] Aave's GHO Move To Arbitrum Puts Stablecoin Expansion Back On The DAO Agenda[2] Aave brings V3 lending and GHO stablecoin to Monad[3] Aave's Monad Market Tops $100 Million in Deposits After V3 Launch[4] Aave hits $100M in Monad deposits within 48 hours of launch[5] Aave V3.7 Launches on Monad as Network TVL Nears $450M
