Alisa Davidson
Published: March 05, 2025 at 5:44 am Updated: March 05, 2025 at 5:44 am
Edited and fact-checked:
March 05, 2025 at 5:44 am
In Brief
Aave’s Stani Kulechov announced the proposal to launch sGHO, a low-risk savings product, introducing the Aave Savings Rate.
Founder and CEO of the decentralized finance (DeFi) lending protocol Aave, Stani Kulechov announced the proposal to launch the sGHO savings product, introducing the Aave Savings Rate (ASR).
sGHO is a new low-risk savings product that allows users to earn yield on GHO, based on Aave’s native lending rate and an incentivized rate partially derived from GHO borrowing revenue. There are no deposit or withdrawal fees associated with it.
Stani Kulechov highlighted that he anticipates sGHO to increase GHO’s outstanding value to between 300M and 500M. For context, each 100M GHO generates the same revenue for the Aave DAO as 1B USDC. The introduction of sGHO will provide Aave users with a stable on-chain savings rate and serve as an attractive entry point for new users into the Aave ecosystem.
According to the proposal, Aave’s GHO stablecoin has experienced strong growth in 2025, now ranking as the 20th largest stablecoin. While growth has been consistent so far, increasing from 200M to over 300M presents new challenges that will require a different strategy.
The stkGHO token rewards users for contributing to the protocol’s security, and has played a key role in GHO’s growth, currently representing 67% of its circulating supply. Following the Umbrella upgrade, stkGHO will remain essential to Aave Protocol’s security and is expected to adjust in size to align with the protocol’s security requirements.
By aligning the size of stkGHO with Aave Protocol’s security needs, Aave has the opportunity to offer a range of yield products serving different risk profiles. This opens the door for the Aave DAO to introduce a new low-risk savings product, which is anticipated to drive the next phase of GHO’s growth and adoption.
Key Advantages Of sGHO: Compounding ASR, No Rehypothecation For Instant Liquidity, Minimal Smart Contract Risk, And More
By depositing GHO into sGHO, users can earn the ASR, represented by an ERC-20 receipt token that accrues value over time. This token is easily integrated with other protocols.
sGHO is funded by revenue generated from the Aave Protocol and is specifically designed to offer the lowest-risk profile among Aave DAO’s yield products.
The key benefits of sGHO’s design include compounding interest through the ASR, no rehypothecation to ensure instant liquidity, a minimal smart contract risk surface, and no deposit or withdrawal fees. The ASR is configurable, providing the DAO with flexibility to offer either a fixed or variable rate that adjusts according to broader market conditions.
The detailed proposal aims to gather feedback from the community. If consensus is achieved on the Temperature check proposal, it will move to the Snapshot stage. If the Snapshot outcome is positive, the proposal will proceed to the Aave Request for Final Comments (ARFC) stage.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa Davidson
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
More articles
