[AAVE] Stablecoins Interest Rate Curve Update

Simple Summary

In light of recent market changes, Chaos Labs recommends setting the target borrow rate for most stablecoins to 6.50%. These changes would be implemented via the direct-to-AIP process.

Motivation

The utilization for stablecoins across Aave has resumed falling after a brief improvement following the last IR curve adjustment, calling for a further reduction in target rates to better align with the market-priced interest rate.

A closer look at the largest stablecoin markets indicates that borrow rates have stabilized between 6% and 8%.

As a result, we recommend setting the target rate for all stablecoins to 6.5%;

Please note that GHO, USDS, and pyUSD are managed separately and, thus, are not included in these recommendations.

Specification

| Protocol | Instance | Asset | Current Slope1 | Rec. Slope1 | | -- |

• | | | | | Aave V3 | Ethereum Core | USDC | 8.50% | 6.50% | | Aave V3 | Ethereum Core | DAI | 8.50% | 6.50% | | Aave V3 | Ethereum Core | USDT | 8.50% | 6.50% | | Aave V3 | Ethereum Core | LUSD | 8.50% | 6.50% | | Aave V3 | Ethereum Core | FRAX | 8.50% | 6.50% | | Aave V3 | Ethereum Core | crvUSD | 8.50% | 6.50% | | Aave V3 | Ethereum Core | USDe | 8.50% | 6.50% | | Aave V3 | Ethereum Prime | USDC | 8.50% | 6.50% | | Aave V3 | Ethereum EtherFi | USDC | 8.50% | 6.50% | | Aave V3 | Ethereum EtherFi | FRAX | 8.50% | 6.50% | | Aave V3 | Arbitrum | DAI | 9% | 6.50% | | Aave V3 | Arbitrum | USDT | 9% | 6.50% | | Aave V3 | Arbitrum | LUSD | 9% | 6.50% | | Aave V3 | Arbitrum | USDC | 9% | 6.50% | | Aave V3 | Arbitrum | FRAX | 9% | 6.50% | | Aave V3 | Optimism | DAI | 9% | 6.50% | | Aave V3 | Optimism | USDT | 9% | 6.50% | | Aave V3 | Optimism | sUSD | 9% | 6.50% | | Aave V3 | Optimism | LUSD | 9% | 6.50% | | Aave V3 | Optimism | USDC | 9% | 6.50% | | Aave V3 | Base | USDC | 9% | 6.50% | | Aave V3 | Metis | m.DAI | 9.50% | 6.50% | | Aave V3 | Metis | m.USDC | 9.50% | 6.50% | | Aave V3 | Metis | m.USDT | 9.50% | 6.50% | | Aave V3 | Avalanche | DAI.e | 8.50% | 6.50% | | Aave V3 | Avalanche | USDC | 8.50% | 6.50% | | Aave V3 | Avalanche | USDt | 8.50% | 6.50% | | Aave V3 | Avalanche | FRAX | 8.50% | 6.50% | | Aave V3 | Avalanche | AUSD | 8.50% | 6.50% | | Aave V3 | Gnosis | WXDAI | 9% | 6.50% | | Aave V3 | Gnosis | EURe | 9% | 6.50% | | Aave V3 | Gnosis | USDC.e | 9% | 6.50% | | Aave V3 | BNB | USDC | 8.50% | 6.50% | | Aave V3 | BNB | USDT | 8.50% | 6.50% | | Aave V3 | BNB | FDUSD | 8.50% | 6.50% | | Aave V3 | Scroll | USDC | 8.50% | 6.50% | | Aave V3 | ZkSync | USDC | 8.50% | 6.50% | | Aave V3 | ZkSync | USDT | 8.50% | 6.50% |

References

• Implementation: AaveV3Ethereum, AaveV3EthereumLido, AaveV3EthereumEtherFi, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Metis, AaveV3Base, AaveV3Gnosis, AaveV3Scroll, AaveV3BNB, AaveV3ZkSync
• Tests: AaveV3Ethereum, AaveV3EthereumLido, AaveV3EthereumEtherFi, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Metis, AaveV3Base, [AaveV3

... please visit link below to view full proposal

https://app.aave.com/governance/v3/proposal/?proposalId=271