What is this about?

The discussion was initiated by Josojo¹ who expressed concerns about the adoption of GHO not meeting expectations. They proposed that a stable GHO to Dollar peg is not possible if the GHO borrowing rate is below the s-DAI interest rate (5%) due to potential exploitation by rate-arbitrators. They also emphasized the importance of a stable peg over a below-market competition interest rate to mitigate borrowers' risk due to volatility. A poll was proposed to gauge community agreement on these insights and a new strategy for GHO adoption was suggested, which includes the introduction of sGHO.

How is the community reacting?

Aave_truetocaesar² provided an explanation of the Stability Fee, an algorithmic interest rate model influenced by the oracle price of the Dai token. They suggested that the interest rates and model for GHO should not be designed with market competition in mind, but rather to manipulate minting behavior. EzR3aL pointed out the existence of other posts regarding GHO and how to repeg, suggesting that ideas should be posted there and mentioned the intention to close the current thread to maintain cleanliness³.

Why this is positive?

The discussion is fostering a proactive approach towards the adoption of GHO. The community is actively engaging in the conversation, providing insights and suggestions on how to improve the situation. The proposal of a poll by Josojo¹ is a positive step towards understanding the community's perspective and making informed decisions.

Why this is negative?

The discussion also highlights some challenges in the adoption of GHO. The potential for rate-arbitrators to exploit the rate difference between sDAI interest and the GHO borrowing rate could lead to instability in the GHO and DAI peg. This could pose additional risks for borrowers due to volatility. The need to close the current thread to maintain cleanliness³ also indicates a potential issue with the organization of discussions within the community.