# GHO Stability Module Explained

The GHO Stability Module is a contract that facilitates the buying and selling of GHO against a certain specific asset.

There is no single GHO Stability Module, rather, there are multiple instances of GHO Stability Modules, and these are registered via a Registry. This Registry can be found [here](https://etherscan.io/address/0x0d8eFfC11dF3F229AA1EA0509BC9DFa632A13578).

There is a GHO Stability Module Registry that has a list of modules. As of today (February 12, 2024), there are two existing modules:

- GSM [USDC/GHO](https://etherscan.io/address/0x0d8eFfC11dF3F229AA1EA0509BC9DFa632A13578)
- GSM [USDT/GHO](https://etherscan.io/address/0x686F8D21520f4ecEc7ba577be08354F4d1EB8262)

## Functionality

Each individual module has a mix of permissioned and permissionless functions.

The permissioned functions use a role-based access control mechanism. The settings of the module that can be updated are:

- `rescueTokens` to rescue ERC20 tokens accidentally sent to the module
- `setSwappFreeze` to freeze the ability to swap
- `seize` to stop the module from working and withdraws all available funds
- `burnAfterSeize` to burn GHO in the module after it's been seized
- `updateFeeStrategy` to update the fee charged for swaps
- `updateExposureCap` to update the limit of the underlying asset to acquire
- `updateGhoTreasury` to update the address of the treasury

The permissionless functionality is to allow users to buy/sell GHO for the underlying.

The buy/sell can be performed either via a regular smart-contract interaction initiated by an EOA or it can also be performed via signature.

The buy/sell of GHO utilizes a "price strategy" which is another deployed contract per module. The idea is to offer the lowest amount of GHO per token of the underlying received for example.

The accrued fees from swaps can be distributed by anyone to the GHO treasury at any time.

## Details

`buyAsset` is the function to purchase the underlying token (for example USDC) in exchange for the user submitting the GHO they hold.

`sellAsset` is the function to sell the underlying token in ordre to receive GHO.

These swaps can be frozen (paused) at any time by a user with the right permissions.

There is a limit on how much of the underlying asset can be bought by the GSM.

Currently, the GHO/USDC GSM can purchase 500,000 units of USDC. The same exposure cap applies currently to the GHO/USDT GSM.

The GSM has a fixed fee that is charged for swaps. The buy and sell fees can be different.

In this case, both are set to 0.2% (20 bps) of the total amount being bought or sold.

Each GSM instance can have a price strategy to determine the prices of the underlying and GHO. Currently, there only exists a fixed price strategy for swaps, both for USDC and USDT.

These fixed price strategies are pegged at 1 to 1. An example with numbers follows:

A user wants to acquire GHO from the GSM by selling USDC into it:

The user wants 100 units of GHO, pegged one they provide 100 units of USDC. With the fee being fixed at 0.2%, the user receives 99.8 units of GHO that are minted and the GSM keeps 0.2 units of GHO.

A user wants to acquire USDC by selling their GHO:

The user wants 100 units of USDC by selling 100 units of GHO. With the fee being 0.2%, they need to send 100.2 GHO in order to acquire 100 units of USDC. The GSM will burn 100 GHO and keep 0.2 GHO as fees.

## Freezing

Contract that checks for freezing/unfreezing conditions of [GHO/USD](https://etherscan.io/address/0xd9096444807da3d05eca6d1e19380133a59394a6)

The bounds for freezing the GSM are:
- Lower bound: 0.99000000
- Upper bound: 1.01000000

The bounds for unfreezing the GSM are:

- Lower bound: 0.99500000
- Upper bound: 1.00500000

### References

GHO codebase can be found [here](https://github.com/aave/gho-core/tree/main/src/contracts/facilitators/gsm).