# \[ARFC\] GHO CEX Earn Incentive Program **URL:** \ **Category:** Governance\ **Created:** [June 5, 2025, 6:58pm UTC](https://governance.aave.com/t/arfc-gho-cex-earn-incentive-program/22284 "2025-06-05T18:58:13Z")\ **Posts on this page:** 1\ **Showing post:** 8
**Author:** ![TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/tokenlogic/32/8248_2.png) [@TokenLogic](https://governance.aave.com/u/TokenLogic)\ **Post date:** [June 18, 2025, 11:00pm UTC](https://governance.aave.com/t/arfc-gho-cex-earn-incentive-program/22284/8 "2025-06-18T23:00:23Z")
Thank you to everyone who provided thoughtful feedback and raised important points. Below are detailed responses to each of the key themes and specific questions raised by community members. * * * ### 1. Retention and Incentive Sustainability _(@sid_areta, @ST0X, @EzR3aL, @Kitten, @LlamaRisk)_ We agree that **retention after incentives end** is a critical metric for success. - **Retention Strategy** : Our goal is to **bootstrap adoption** and GHO visibility across CEXs, but the long-term sustainability depends on **unlocking utility** (margin, perp collateral, trading pairs) and ensuring that GHO remains competitive as a stablecoin. - **Incentives Design** : Yield offered to CEX users is **not perpetual**. It will taper off as utility, circulating supply and integrations ramp up. To this end, we are prioritizing **high-quality listings** with supportive venues that are open to longer-term GHO utility. - **Fixed APR Campaign** : The proposed campaign uses a **targeted APR approach** for holding GHO, which avoids the inflated and unsustainable APRs. Rewards are distributed based on **actual GHO supply held on CEXs** , ensuring cost-conscious allocation aligned with performance. - **Cost Efficiency First** : This strategy ensures we **only spend against verified GHO holdings** , minimizing waste and focusing on velocity, retention, and liquidity provisioning. - **Long-Term Sustainability** : Looking ahead, if a significant portion of GHO on CEXs is minted via GSMs, we can explore transitioning to a **yield-sharing model** where part of the GSM yield helps fund a longer-term CEX Earn program. We’re also exploring if **sGHO functionality could be integrated directly by CEXs** to provide native passive yield without a separate reward layer. - **Benchmarking** : We’ve studied prior CEX Earn campaigns, including Ethena’s approach. Programs that combined **earn mechanics with active utility** had far greater retention than passive rewards-only campaigns. * * * ### 2. Market Maker Selection and Structure - **Selection Criteria** : We have shortlisted MMs based on: - **Working Capital and Hurdle Rate Structure** : - **GSM Access for Market Efficiency** : * * * ### 3. GSM Interaction - **USDT/USDC inflows** from CEX users trading into GHO will be used to **mint GHO via the GSMs** (e.g., `stataUSDT`). - This newly minted GHO will fund user rewards and simultaneously **earn yield for the DAO** by depositing stablecoins into Aave. - A dedicated dashboard will visualize **GSM inflows, mint volume, and yield generation**. * * * ### 4. Liquidity Fragmentation & Peg Concerns - **Preservation of On-Chain Liquidity** : This program is **funded separately** from existing DEX incentives to prevent erosion of core on-chain liquidity. - **CEX Incentives Are Additive** : We see CEXs as a growth and distribution channel, not a replacement. On-chain users and yield remain the foundation of GHO. - It is worth noting that in the future we have the option to combine the budget of the ALC and CEX Earn program into a single GHO incentive budget. This is not applicable yet but will be kept in mind for when we enter the consolidation state of GHO growth on CEXs. * * * ### 5. Legal and Regulatory Realism - We recognize the evolving regulatory landscape for stablecoins and appreciate LlamaRisk’s insights. - Listings will focus on **jurisdictions with manageable regulatory hurdles** * * * ### 6. Program Tracking and KPIs Yes, a dedicated dashboard from TokenLogic will track: - GHO minted via GSMs - TVL in Earn programs - Active participants - Weekly rewards distributed - On-chain vs CEX balances - Peg deviation and liquidity health This will enable community oversight and real-time performance evaluation. * * * ### Closing Note We deeply appreciate the community’s input and scrutiny. Our intent with this program is to scale GHO in a way that **expands its reach** without compromising its **on-chain integrity**. The CEX Earn campaign is designed to bootstrap growth, while aligning with a long-term vision for **GHO as a systemically important stablecoin** across both DeFi and CEX environments. --- _[View the full topic](https://governance.aave.com/t/arfc-gho-cex-earn-incentive-program/22284)._