title: [ARFC] sGHO Launch Configuration
author: @TokenLogic
created: 2026-03-25
Summary
This publication provides an overview of the new native on-chain yield-accruing sGHO savings product upgrade. Within, we define the initial parameter configuration, present the migration process from the current sGHO (stkGHO rebranded), and introduce the new sGHO admin steward role.
The proposal sets a fixed Aave Savings Rate (ASR) of 4.25% APR (50 basis points above the Sky Savings Rate), refines the boost program from 8 boosts to 1 transitional boost, establishes the sGHO Steward as the rate governance mechanism, and defines an aggressive migration schedule from the legacy sGHO contract.
Motivation
Overview
GHO has reached an all-time high circulating supply of 404.7M across eight chains, with sGHO deposits totalling 304.6M. This growth, driven primarily by the @ACI powered savings product, validates the demand for a yield-bearing GHO instrument. The Aave Team has done a tremendous job managing the Merit-based reward system that fuelled this trajectory.
However, the current sGHO implementation presents structural limitations that constrain further growth:
Composability unlock. The current Merit-based distribution, while highly effective for bootstrapping, relies on an off-chain reward model, making it difficult for external protocols to integrate natively. Moving to ERC-4626 means yield accrues directly in the share-to-asset conversion rate, making sGHO instantly composable across DeFi lending protocols, yield aggregators, and centralised exchanges.
Streamlined yield story. The eight-boost system ACI designed was instrumental in driving targeted behaviours during the growth phase. With sGHO now at scale, consolidating five of those boosts into the native rate creates a simpler, more legible value proposition for the next wave of integrators and depositors, while retaining one strategic boost continues to reward core Aave ecosystem alignment.
Frictionless onboarding. The introduction of the GhoRouter contract eliminates multi-step conversion friction. Users can go from USDC to sGHO in a single transaction, dramatically lowering the barrier to entry for new depositors and enabling seamless integration paths for partners.
Market opportunity. With the Sky Savings Rate at 3.75% APR and broader DeFi yields compressed, a competitive fixed rate positions sGHO to absorb significant stablecoin demand. At the current sGHO deposit base of ~305M, incoming large allocations would compress the Merit-based yield from ~4.68% to approximately 3.70% at a deposit base of 385 M. Setting the native rate at 4.25% APR provides a clear premium over the competing sUSDS product while remaining sustainable within the DAO’s revenue framework and other yield products in this rate environment.
The ARFC: GHO Savings Upgrade established the technical foundation and passed Snapshot. This proposal now defines the launch parameters to operationalise that upgrade.
sGHO (stkGHO) to sGHO (ERC4626) Transition
The current sGHO implementation utilises stkGHO from Aave’s Safety Module and periodic claimable rewards distributed via ACI’s Merit program. The Merit program provides variable yields, consisting of a Base rate and a tiered boost system, to encourage specified types of behaviour.
Details on the existing Boost campaigns are available on the ACI website at here.
This proposal aligns the current sGHO (stkGHO) with the new sGHO (ERC 4626), adopting a Fixed Base Rate and consolidating the boosts from 8 to 1 (Stakoor) applied to both sGHOs (stkGHO and ERC 4626). In doing so, this shifts the current 275k/week spend to a variable amount subject to user deposits and boost application.
Having aligned both sGHO (stkGHO) with the new sGHO (ERC 4626), to encourage migration, the existing sGHO (stkGHO) fixed rate will be less than the new sGHO (ERC 4626) rate. It will gradually decrease over three-week epochs until rewards are fully discontinued.
The Stakoor boost shall be applied equally to each sGHO (stkGHO and ERC 4626) during the transition and then removed from sGHO (stkGHO) at sunset.
Specification
Architecture and Roles
This section provides an overview of how the sGHO system comes together, the contracts, the administrative roles, and their interactions.
sGHO Contract Architecture
The upgraded sGHO is a single ERC-4626 compliant vault (upgradeable proxy pattern) audited by Certora and, more recently, by Sherlock. Key characteristics:
- Standard. Full ERC-4626 compliance with
deposit,withdraw,mint, andredeemfunctions - Yield mechanism. Internal index-based accounting, where a
yieldIndexgrows over time at a configuredratePerSecond. Yield accrues continuously and is reflected in the share-to-asset conversion rate - Permit support. EIP-2612 gasless approvals via
depositWithPermit() - Pausable. All non-admin functions can be paused by the
PAUSE_GUARDIAN_ROLEholder - No rehypothecation. Deposited GHO remains in the contract. The DAO funds yield payouts separately from the Collector
- No cooldown. Atomic withdrawals, no lock-up period
- No slashing. No economic risk to assets held with sGHO contract.
The sGHO Steward contract manages rate and supply cap parameters through a structured rate model with role-based access control.
sGHO Steward Role
Following the precedent set by the GHO Stewards ARFC, the sGHO Steward (GhoSghoSteward) enables responsive rate management without requiring full governance votes for every adjustment. The sGhoSteward can update the following parameters:
- Rate (fixedRate, floatRate): Set the target yield rate components
- Amplification factor: Adjust the amplification multiplier for the float rate
- Supply cap: Set the maximum deposits in the vault
There is also a constraint on the Max Rate MAX_SAFE_RATE = 5,000 bps (50% APR), enforced by the sGHO contract itself.
Each of the above sGhoSteward influenced parameters is only callable by the following SAFE Address referred to as Gho Steward:
Gho Steward: 0x8513e6F37dBc52De87b166980Fa3F50639694B60
Deployment status: Contracts have been audited and merged, and are scheduled for deployment soon. Deployment addresses will be confirmed in the AIP.
Full implementation: github.com/aave-dao/gho-origin/pull/29
sGHO Rate Governance
The GHO Stewards, a 3-of-4 multi-sig of Aave service providers already operational for GHO parameter management, will govern the sGHO rate. The sGHO Steward contract enforces the following role structure:
| Role | Holder | Permissions |
|---|---|---|
YIELD_MANAGER_ROLE |
GHO Steward | Set target rate directly on the vault |
AMPLIFICATION_MANAGER_ROLE |
Gho Steward | Adjust amplification factor |
FLOAT_RATE_MANAGER_ROLE |
Gho Steward | Adjust float rate component |
FIXED_RATE_MANAGER_ROLE |
Gho Steward | Adjust fixed rate component |
SUPPLY_CAP_MANAGER_ROLE |
Gho Steward | Set vault supply cap |
PAUSE_GUARDIAN_ROLE |
Aave Protocol Guardian | Emergency pause/unpause |
Aave Protocol Guardian: 0x2CFe3ec4d5a6811f4B8067F0DE7e47DfA938Aa30
Rate adjustments will be discretionary, informed by GHO growth metrics, prevailing market conditions, and demand for sGHO. All rate changes will be documented on the governance forum.
GhoRouter
Alongside the sGHO vault, the GhoRouter contract (PR #34) provides a stateless routing layer that collapses multi-step conversions into single transactions. Without the router, converting USDC to sGHO requires three separate operations: (1) deposit USDC into stataUSDC, (2) sell stataUSDC on the GSM for GHO, (3) deposit GHO into sGHO. The router handles this entire flow atomically.
Supported flows:
| Flow | Input | Output | Description |
|---|---|---|---|
swapToGho |
Underlying (e.g. USDC) or stataToken | GHO | Convert any supported asset to GHO via GSM in one call |
swapFromGho |
GHO | Underlying or stataToken | Convert GHO to any supported asset via GSM |
swapToSGho |
Underlying or stataToken | sGHO | Full USDC-to-sGHO in one transaction (GSM + vault deposit) |
depositForSGho |
GHO | sGHO | Direct GHO-to-sGHO deposit (no GSM needed) |
swapFromSGho |
sGHO | Underlying or stataToken | Full sGHO-to-USDC in one transaction (vault redeem + GSM) |
redeemSGho |
sGHO | GHO | Direct sGHO-to-GHO redemption (no GSM needed) |
Key properties:
- Stateless. The router never holds user funds between transactions. Tokens are pulled, routed, and forwarded to the recipient atomically
- Slippage protection. Every flow includes a
minAmountparameter; transactions revert withSlippageExceededif output falls below the threshold - Partial fill handling. If the GSM cannot consume all input, the remainder is returned to the caller
- GSM allowlist. The router owner curates which GSMs can be used, with validation on enablement (contract existence, correct GHO token, valid underlying)
- Preview functions. All six flows have a corresponding
viewpreview function for gas-free output estimation
The GhoRouter is a critical UX improvement for the sGHO launch. Eliminating conversion frictions, centralised exchanges and DeFi protocols to offer one-click sGHO entry and exit, significantly lowering the integration barrier.
Full implementation: github.com/aave-dao/gho-origin/pull/34
Initial Rate Configuration
sGHO
| Parameter | Value |
|---|---|
| Target Rate (ASR) | 4.25% APR (425 basis points) |
| Rate Type | Fixed |
| Sky Savings Rate (reference) | 3.75% APR |
| Premium over SSR | 50 basis points |
| Steward Formula | amplification = 0, floatRate = 0, fixedRate = 425 |
| Maximum Rate (contract cap) | 50% APR (5,000 bps) |
The fixed rate is achieved by setting amplification = 0 and floatRate = 0 on the sGHO Steward, making the ASR equal to the fixedRate parameter alone. This eliminates dependency on any external index rate and provides predictability for depositors and integrators.
Rationale for 4.25% APR:
- Positions sGHO 50 bps above the Sky Savings Rate (3.75%), providing a competitive premium while remaining sustainable as sGHO deposits grow with incoming large allocations
- Provides a clear incentive for migration from the legacy sGHO contract to the new ERC-4626 vault
- Maximises demand absorption in the current low-rate environment to accelerate GHO supply growth
- The fixed nature simplifies integration for centralised exchanges and DeFi protocols
Gho Steward Constraints
The sGHO contract enforces a maximum rate of 5,000 bps (50% APR) via MAX_SAFE_RATE. Beyond this hard cap, the sGhoSteward imposes no additional on-chain constraints on rate adjustments. The GHO Stewards are expected to exercise prudent discretion when updating parameters, guided by market conditions and GHO growth metrics.
Merit Configuration Update
sGHO (rebranded stkGHO)
The current sGHO (stkGHO) consists of a fixed weekly budget of 275k, a variable Base rate, and eight (8) boost multipliers. Upon implementation of this proposal, the eight (8) boost multipliers are reduced to one (1) – Stakoor – and the variable base rate is converted to a fixed rate at a 50 bps discount to the new sGHO (3.75% APR). The discount is then increased over time until Day 43, when rewards are discontinued.
| Instance of sGHO | Current | Proposed |
|---|---|---|
| sGHO (stkGHO) | Variable derived from fixed budget with eight (8) boosts | 3.75% Fixed Rate + One (1) boost (Stakoor) |
| sGHO (ERC4626) | NA | 4.25% Fixed Rate + One (1) boost (Stakoor) |
stkGHO Fixed Base Rate Discount and Boost Schedule
| Phase | Duration | New sGHO (ERC-4626) | Legacy sGHO | Differential |
|---|---|---|---|---|
| Phase 1: Grace period | Weeks 1-3 | 4.25% APR (native) | 3.75% APR (fixed) | -50 bps |
| Phase 2: Accelerated Migration | Weeks 4-6 | 4.25% APR (native) | 3.25% APR (fixed) | -100 bps |
| Phase 3: Full sunset | Week 7+ | 4.25% APR (native) | 0% (rewards terminated) | N/A |
| sGHO (stkGHO) | Current | AIP Execution to Day 21 | Day 22 to 42 | From Day 43 |
|---|---|---|---|---|
| Discount Schedule | NA | -50 bps | -100 bps | Cease rewards |
| Boost Schedule | 8 | 1 (Stakoor) | 1 (Stakoor) | 0 |
Transitional Boost
A single boost is retained on a transitional basis as a supplementary top-up distributed via Merkl, separate from the native ERC-4626 rate. This boost will be phased out as the native rate matures and sGHO adoption stabilises, with the timeline aligned to the broader transition away from off-chain reward infrastructure.
| Boost | Value | Criteria |
|---|---|---|
| Stakoor | 5% | Hold stkAAVE on Ethereum (minimum threshold applied to exclude dust accounts; threshold not disclosed to prevent gaming) |
The Stakoor boost is retained because it directly rewards long-term AAVE staking, a behaviour that strengthens the Aave ecosystem’s security layer. The long-term objective is for the native sGHO rate to be the sole yield mechanism, with no dependence on off-chain boost infrastructure, and for AAVE/stkAAVE holders to receive preferential borrow rates on Aave v4.
The Aavenger boost (which uses AAVE as collateral) has been sunset because it creates an incentive to borrow GHO against AAVE collateral and deposit it into sGHO, effectively subsidising a rate arbitrage loop.
Boosts Removed
The yield previously allocated to these boosts is absorbed into the native sGHO base rate:
| Boost | Value | Criteria (for reference) |
|---|---|---|
| Aavenger | 5% | Use AAVE as collateral on Ethereum |
| Second-degree user of aligned protocol | 5% | DeFi Saver and Den users |
| ETH Maxi | 5% | Supply wETH on Ethereum, Lido, Arbitrum, or Base instances |
| Holdooor | 5% | Hold AAVE for 100+ days in the past year on Ethereum |
| Staker | 5% | Stake AAVE or StkBPT on Ethereum |
| Active in Governance | 10% | Vote or delegate to an Aave DAO recognized delegate platform |
| Aave Aligned Frens | 5% | Boost for specific addresses/protocols defined by Aave DAO (currently InfiniFi and Gate.io) |
Migration
There is no atomic migration contract. Users holding legacy sGHO will need to withdraw GHO from the legacy sGHO contract and deposit it into the new ERC-4626 sGHO vault.
The migration schedule is defined in the Merit Configuration Update section above. The three-phase, ~7-week schedule with 3-week epochs provides a grace period for large depositors and integrators to coordinate their migration, followed by an accelerated incentive to complete the transition.
Beyond the rate differential, migration is further incentivised by:
- Composability: ERC-4626 standard enables integration across the DeFi ecosystem
- Simplified UX: No weekly claims through Merkl for the base rate; yield accrues automatically
- GhoRouter: One-click entry from USDC/stataTokens directly into the new sGHO
Integration Opportunities
The ERC-4626 standard unlocks significant new distribution channels for GHO:
- Centralised exchanges: Simplified earn programs where yield is transparently reflected in the share price, requiring no custom integration logic
- Stablecoin backing: Other stablecoin protocols can use sGHO as yield-bearing reserve collateral
- DeFi protocols: Native integration with lending protocols (Fluid), yield tokenisation (Pendle), and aggregators that support the ERC-4626 standard
- Cross-chain deployment: The standardised interface enables consistent sGHO deployments across chains
Security
The sGHO contract and sGHO Steward have undergone extensive review:
- Certora audit (September 9, 2025): Dedicated sGHO audit covering the vault and steward contracts
- Sherlock audit: Independent security review (PR #35)
- Precision analysis: Documented in the repository, confirming near-zero precision loss in yield calculations and overflow safety for the yieldIndex at maximum rate for 100+ years
- Legacy audits: The GHO protocol has been audited 12 times by OpenZeppelin, Sigma Prime, ABDK, Certora, and Emanuele Ricci since 2022
All audit reports are available in the gho-origin repository.
Summary of Parameters
| Parameter | Value |
|---|---|
| ASR (initial) | 4.25% APR (fixed) |
| Steward Amplification | 0 |
| Steward Float Rate | 0 |
| Steward Fixed Rate | 425 bps |
| Supply Cap | 400,000,000 |
| Boosts Retained | Stakoor (5%) – transitional, to be phased out |
| Boosts Removed | 7 campaigns including Aavenger (yield folded into base rate) |
| Aave Finance Steward Allowance | 10M GHO |
| Rate Governance | GHO Stewards (existing multi-sig) |
| Pause Guardian | Dedicated Safe (same config as GHO Steward) |
| Migration | 3-phase, ~7-week schedule with 3-week epochs (legacy: 3.75% → 3.25% → 0%) |
Disclosure
TokenLogic is an active service provider to the Aave DAO, the beneficiary of stream 100072 and the KPI as outlined in this publication. The scope of this engagement is available via this forum proposal.
TokenLogic supports and maintains an independent delegate voting platform within the Aave community.
TokenLogic and associated entities have no undisclosed material conflicts of interest at the time of submission.
Next Steps
- Gather feedback from the community.
- If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage.
- If the snapshot outcome is YAE, escalate this proposal to the AIP stage.
Copyright
Copyright and related rights waived via CC0.