DeFi lending protocol Aave launched its U.S. dollar-pegged decentralized stablecoin GHO on the Ethereum mainnet.

GHO will fall under Aave DAO’s governance, meaning the community of token holders will vote on its permitted supply, risk parameters, interest rate adjustments as well as who can mint the stablecoin.

Anyone can mint GHO by supplying tokens as collateral to the Aave V3 protocol on Ethereum, ensuring the stablecoin is overcollateralized. The transactions will take place through self-executing smart contracts, viewable on a blockchain explorer.

“A unique feature of GHO is that the collateral deposited into the Aave V3 protocol is productive and continues to earn yield, reducing the user’s cost of borrowing GHO,” explained Aave in a blog post.

Since the stablecoin is native to Aave, the interest paid on borrowers of GHO will be directed to the Aave DAO Treasury. Meanwhile, those who stake AAVE tokens in the Safety Module will be awarded a discount on GHO, the protocol’s developers said.

The initial minting capacity for GHO has been capped at $100 million and can be updated by the DAO after governance approval. At the time of writing, around $2 million GHO had been minted despite a relatively low interest rate on offer.

In May, DeFi protocol Curve deployed its own native U.S. dollar-pegged stablecoin crvUSD, with users minting close to $20 million within 24 hours of its launch.