The control finding
GHO is backed by on-chain collateral. Aave governance can change its parameters, but it cannot freeze an address.
- Holder’s position
- GHO is an Aave-native stablecoin created against approved collateral under governance-set parameters. It is not a bank liability.
- Redemption or exit
- There is no Circle-style one-dollar issuer redemption. Stability depends on protocol mechanisms, collateral, incentives, and market liquidity.
Dependencies an advisor should record
- Aave governance and facilitators
- Approved collateral and risk parameters
- Oracle and liquidation systems
- Savings or staking contracts when using sGHO
- Ethereum or another supported settlement chain
Why this distinction matters
GHO illustrates why “stablecoin” is too broad a diligence category. Its control and redemption model differs materially from USDC even when both appear in the same lending venue.
On-chain collateral and governance set the terms, but no issuer blocklist exists. That finding can coexist with a sound reserve, useful product, or appropriate client role. The grade prevents the on-chain wrapper from being mistaken for the absence of an administrator.
Questions before use
- Does the exact contract and chain match the instrument reviewed here?
- Which party can mint, burn, pause, upgrade, block, or redeem?
- Does the client have direct redemption access or only secondary liquidity?
- What protocol, bridge, wallet, and custodian dependencies are added?
- Which event would force review or exit?
Sources
Documents and product terms can change. This profile records the control interpretation reviewed on 2026-08-19; verify current terms before implementation.
Legend: No freeze key: no issuer or administrator can freeze an address at this layer · Governed, no freeze: on-chain collateral and governance set the terms, but no issuer blocklist exists · Mixed control: on-chain mechanisms sit beside custodians, real-world assets, a central transaction orderer, or other parties a court or regulator can compel · Issuer can freeze: a named organization or administrator controls issuance, transfers, reserves, redemption, or address restrictions. How grading works.