# GHO Collateralization Ratio

**Overview**

This indicator monitors the ratio of GHO minted from the AAVE facilitator to Aave's deposits used as collateral backing it. It ensures that GHO is overcollateralized at all times to sustain its intended $1 peg.

The indicator is calculated as the ratio of the number of GHO tokens minted from the AAVE facilitator to the total value of Aave's deposits (in USD) used as collateral backing it.

**How can I use it?**

<figure><img src="https://lh5.googleusercontent.com/6UD7fINWDp9XcQBs1VQkISu41sCOloVL14dusJRmVfGob0FvXdyLJ3kopTtE7GpNCk2E3aY4m9bHniPLoRWUoToL2-5J7u4RcAlc6c8q1g9lJPLJCPjSLvYHT4TeY9mP-53aZ57eKvNDvQJluIO_660" alt=""><figcaption></figcaption></figure>

Monitoring this ratio is essential to maintain the stability and credibility of GHO. If the collateralization falls below a certain level, it could threaten the $1 peg, leading to loss of trust and potential market disruptions. Maintaining overcollateralization is key to ensuring stability and integrity in the associated ecosystem.

The stablecoin industry often requires collateralization to ensure that tokens maintain a stable value. In the case of GHO, keeping track of the overcollateralization ensures that the token continues to sustain its intended $1 peg, making this indicator an essential tool for risk management and operational oversight.


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