title: [Gho Stewards] September 2026 - GHO Parameter Update
author: @TokenLogic
created: 2026-09-14
Overview
This publication raises the GHO Borrow Rate on Horizon, adjusts the GHO Stability Module burn fees, raising the stataUSDC instances to 15 bps and lowering the Ethereum stataUSDT instance to 10 bps, and supports greater potential GHO minting volume on the Monad Network.
Motivation
GHO’s peg
Over the last 30 days leading up to 14 September, the GHO/USD price has ranged between 6.7 bps and 13.6 bps under par, with its latest standing at 12 bps under $1.00. While USDT’s price has recovered over the last month to par with USDC and within 2-3 bps of the peg, the GHO peg has not followed. Currently, GHO trades roughly 10.5 bps below USDC and 9.2 bps below USDT. The discount narrowed through the last week of August but recently reopened and continues to trade at a discount.
The discount has been reflected in GSM outflows over the same period. The Ethereum USDT GSM has drained from 40.8M to 18.6M over three weeks as GHO traded below the module’s redemption threshold on secondary venues; the module’s redemption fee now stands at 15 bps following the latest change.
The Ethereum USDC GSM has not attracted any inbound flows, and the current 10 bps burn fee would allow market arbitrage if it were to be filled. Each GHO redeemed through a module retires a unit of backing, forgoing the underlying Aave supply yield, so the discount impacts the Aave DAO revenue, as well as GHO’s peg.
Horizon borrow rate
Following our latest GHO Stewards changes, the three Ethereum venues price GHO debt at 4.25% on Core, at 3.84% on Prime, and at 3.00% on Horizon. Horizon sits 125 bps below Core and about 85 bps below Prime. At 3.00%, looping Horizon’s RWA collateral against GHO debt is profitable and drives strong demand, and the borrowed GHO is sold for other stablecoins to buy more collateral. Every loop opened at that rate is GHO minted at 3.00% and sold into the market.
Horizon GHO debt rose from 23.2M to 39.0M, an increase of 68% over the 30 days, and the GHO discount widened over the same period. The two series move together, as Horizon borrows funds and sells them on the market to execute looping strategies. The correlation is direct and visible in the paired chart, and it resulted in selling pressure on the peg.
We propose raising the Horizon GHO base rate from 3.00% to 3.25%. Horizon’s curve is flat, so the 25 bps applies to every unit of Horizon GHO debt at every utilization level from the moment the change takes effect. Horizon remains the lowest-priced venue after the change, below Prime at 3.84% and Core at 4.25%, so the RWA arrangement remains profitable while the margin available to a borrower who mints to sell narrows.
Monad USDC GSM capacity
For a large holder looking to acquire GHO, we recommend coordinating the purchase through the Monad USDC GSM. The Monad USDC GSM is currently empty, with a GhoReserve limit of 25M, a USDC exposure cap of 40M, and a 10 bps redemption fee. We recommend raising the GhoReserve limit from 25M to 50M and the USDC exposure cap from 40M to 50M, so the full purchase can be issued on Monad. The USDC the buyer provides is held in the GSM module as wrapped Aave aTokens, earning the Monad USDC supply yield for the DAO, which is currently elevated by the Monad incentives program.
GSM redemption fees
Given the expected influx of USDC into the Monad GSM and the current GSM redemption fee creating arbitrage opportunities, we recommend adjusting the USDC GSM redemption fee across all instances.
As such, we raise the redemption fee from 10 to 15 bps on the Ethereum, Monad, and Arbitrum USDC GSMs. The mint fee stays at zero in every instance, so the coordinated purchase is unaffected, and the change reaches only the exit.
Alongside the USDC change, we lower the Ethereum USDT GSM redemption fee from 15 bps to 10 bps. The module holds 18.6M of USDT backing, and at 10 bps redemption arbitrage engages whenever GHO trades more than 10 bps below USDT, pulling the price back toward par. The change is there to support the peg if needed. We do not expect meaningful redemption size to happen at once: GHO trades about 9 bps below USDT at the latest oracle post, inside the threshold, so the lower fee acts only if the discount widens again.
At 15 bps, the discount has to exceed the peg discount before redemption pays, and the GHO discount has not exceeded 15 bps at any point in the last 30 days, with the widest discount reaching 12.5 bps on the Chainlink GHO/USD feed.
Specification
The following parameter updates will be implemented:
| Market | Reserve / Product | Parameter | Current | New |
|---|---|---|---|---|
| Ethereum Horizon | GHO | Base Rate | 3.00% | 3.25% |
| Monad | USDC GSM | GhoReserve limit | 25,000,000 | 50,000,000 |
| Monad | USDC GSM | USDC exposure cap | 40,000,000 | 50,000,000 |
| Ethereum | USDC GSM | buy fee | 10 bps | 15 bps |
| Monad | USDC GSM | buy fee | 10 bps | 15 bps |
| Arbitrum | USDC GSM | buy fee | 10 bps | 15 bps |
| Ethereum | USDT GSM | buy fee | 15 bps | 10 bps |
Disclaimer
TokenLogic is an active service provider to the Aave DAO, the beneficiary of stream 100086 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
- Implement the Horizon GHO base rate update through the Risk Stewards within their existing caps and cooldowns.
- Implement the Monad USDC GSM capacity and the GSM redemption fee updates through the GHO Risk Council.
- Monitor the peg, GSM flows, and Horizon debt weekly following execution, and report to the community before any further adjustment.
Copyright
Copyright and related rights waived via CC0.