Aave is one of DeFi’s first successful protocols. After launching in 2018, the platform has not only expanded to serve other Ethereum layer-2 solutions like Base and Arbitrum but now has an algorithmic stablecoin similar to DAI, called GHO.
On February 12, Aave revealed that there was a proposal to change how GHO fees will be paid. GHO minting and transfers come with a fee as a solution operating on a public ledger. However, since gas fees change depending on supply and demand, there was a need to ensure predictability.
Aave Labs proposes a gas token framework for @GHO.
Using GHO as a gas token enables predictable pricing for gas fees, particularly in low-fee networks. pic.twitter.com/6TZR2tW9VJ
— Aave (@aave) February 12, 2025
Adopt GHO For Gas Payment?
In a post on X, Aave said establishing a new framework for GHO users to pay gas fees using the stablecoin, not ETH as is currently the case, would solve the issue of fluctuating gas fees, stabilizing transaction costs as a result.
To do this, the team will use their native bridge as a liquidity pool when minting GHO. For this reason, security is needed, considering how bridges can be susceptible to attacks, introducing weak points. In light of this, the framework will also embed security and liquidity management, making them integral to its core infrastructure.
Lens Chain, an Ethereum layer-2 platform, will be the first to adopt GHO as its native gas token. Lens Chain is ideal for testing this proposal as a layer-2 platform that uses rollups to speed up transaction processing and lower costs.
Lens Chain will run on @GHO
The first L2 with a stablecoin gas token. pic.twitter.com/8gFOeMwx3D
— Lens Chain (@LC) February 12, 2025
Layer-2 will benefit from this initiative since if they replace gas payment in ETH with GHO, users will be assured that transaction costs will be predictable.
Nevertheless, it is worth knowing that gas fees are already low when transacting on layer-2s, and it will be interesting to see how users will receive this proposal.
Beyond this development, Aave continues to grow in strength. On-chain data shows that over $20 billion worth of assets were moved to Aave in the last year alone.
ICYMI: @aave added over $20 billion in net deposits in the past year. pic.twitter.com/ff5nRpyQTm
— Token Terminal | We are hiring! (@tokenterminal) February 13, 2025
According to DeFiLlama, the protocol now manages over $19 billion as total value locked (TVL), with most assets locked on Ethereum.
Ethereum Foundation Moves Over 30,000 ETH to Aave
Yesterday, the Ethereum Foundation, the organization tasked with promoting the first smart contracts platform, moved over 30,000 ETH to Aave.
EF Treasury has deployed:
– 10,000 ETH into Spark
– 10,000 ETH into Aave Prime
– 20,800 ETH into Aave Core
– 4,200 ETH into CompoundWe're grateful for the entire Ethereum security community that has worked diligently to make Ethereum DeFi secure and usable!
— Ethereum Foundation (@ethereumfndn) February 13, 2025
The foundation relieves pressure on the second most valuable coin by lending a portion of its millions of ETH. After dropping below $3,000, there are fears ETH may slide to $2,000 or worse as the market recoils following gains in Q4 2024.
For months now, the Ethereum Foundation has been criticized for helping accelerate the ETH sell-off, diffusing upside momentum. Last year, they sold thousands of ETH to cover operational costs.
After criticism, which could see leadership changes, the foundation is now taking a different approach. One of them involves lending ETH and using the received yield to cover costs.
AAVE, the governance token of the Aave protocol, is under pressure, like ETH. From the daily chart, the token is flat, with support above $200. Although the uptrend remains, buyers must step in and reverse the losses of the past few trading weeks.
(AAVEUSDT)
A clear break above $275 may lift sentiment, subsequently driving prices back to Q4 2024 highs.
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Aave Wants Gas Payment in GHO Details
- Aave is proposing a new framework for gas fee payments
- Lens Chain to trial use of GHO for gas fees instead of ETH
- AAVE prices stable but in an uptrend
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