CoinDesk Report:
Author: Vince Quill, CoinTelegraph; Translation: Baishui
Following a vote by Aave’s decentralized autonomous organization (DAO), the GHO stablecoin has been deployed on the Arbitrum network.
Aave’s DAO plans to gradually introduce the GHO stablecoin on multiple networks over time, but chose to deploy it on Arbitrum to leverage the low transaction costs and higher throughput of Layer 2 networks.
The decision to phase the stablecoin rollout across other networks is based on security and risk management considerations, enabling the DAO to test the waters before expanding GHO’s presence to other blockchain ecosystems.
Chainlink’s CCIP Enables Multi-Chain GHO Feasibility
Chainlink’s CCIP protocol serves as an interoperability layer, allowing Aave DAO to migrate the initially Ethereum-launched GHO stablecoin to Arbitrum and future networks.
An overview of Chainlink’s CCIP interoperability protocol in operation. Source: Chainlink
Stablecoin interoperability is facilitated through two mechanisms: the burn and mint model, and the lock and release functionality, whereby GHO tokens are initially locked or burned on the source chain (referred to as the “Vault contract” on Ethereum) and subsequently released on the new chain.
If GHO stablecoins are bridged from Ethereum to a different blockchain, GHO tokens are locked in the Vault contract on Ethereum and minted by service providers on the target blockchain.
Conversely, when GHO is bridged from another blockchain network to Ethereum, tokens on the alternate chain are burned, releasing an equivalent amount from the Vault contract on the Ethereum blockchain.
If neither chain is Ethereum, service providers will burn GHO tokens from the first chain and mint new tokens on the second chain.
Chainlink and Arbitrum: Evolving Partnership
The relationship between Chainlink and Arbitrum began in 2020 and has since evolved into a partnership aimed at facilitating cross-chain development for decentralized applications.
Since then, Chainlink has emerged as a leading blockchain interoperability and oracle network, engaging in experimental pilot programs with global entities such as SWIFT to transfer value across blockchains.
Building on this momentum, adoption and usage of Chainlink’s CCIP are set to increase in 2024, with cumulative network fee revenue reaching $377,724 in March, largely driven by activities on Arbitrum.