Aave Wallet Activity Reaches 2022 High on GHO Stablecoin Decision

User activity on lending protocol Aave rose to a 2022 high ahead of the launch of its yield-generating stablecoin, GHO, while remaining below levels reached last year spurred by growing interest in decentralized finance (DeFi).

Active addresses – or wallets that made transactions – on Aave climbed above 1,860 last week, IntoTheBlock data shows. The heightened activity likely came as users voted on a motion to introduce GHO.

The proposal was passed by the community over the weekend. The token will be released soon and will allow users to mint the tokens against a diversified set of cryptocurrencies.

On-chain activity on Aave has been increasing since the proposal, IntoTheBlock said in a tweet. Similar activity was previously seen in the last week of March, data shows.

The protocol’s native aave (AAVE) tokens experienced volatile trading during the past week, rising from $77 last Tuesday to over $105 over the weekend before dropping back to about $90 at writing time, CoinGecko data shows.

GHO will work in a similar way to existing algorithmic stablecoins, which mint exactly $1 worth of tokens when users provide $1 worth of cryptocurrency collateral. Users, however, will continue to earn interest on the supplied collateral.

According to the now-passed proposal, GHO will send all the interest received on loans to the decentralized autonomous organization (DAO), generating revenue for the community and allowing the DAO to bolster its treasury for funding future products or tools. Such factors have generated community interest in the GHO token.

Last year, as many as 6,200 wallets were active in February and transactions involving Aave touched a record 1.1 million daily figure in May. The number of transactions slumped to as few as 96,000 a day earlier this year amid a market-wide price decline, IntoTheBlock data shows.