Stablecoin IR Curve Amendment
Stablecoin IR Curve Amendment
Author
Aave Chan Initiative
Creator
0x57ab7ee15cE5ECacB1aB84EE42D5A9d0d8112922
Simple Summary
A proposal to decrease stablecoin Interest Rate parameters across all Aave deployments.
Motivation
Given the decrease in DSR — from 7% to 6% — it is prudent to update Aave stablecoin interest rates to best align with the broader market. Previously, we recommended reducing rates concurrent with the last DSR decrease from 8% to 7% in July.
The new parameters went into effect in mid-July and have continued to provide stable rates across Aave V3. We note that, following the announcement of the DSR decrease, there has been a notable drop in rates, converging around 5.5%.
Following our methodology laid out in previous recommendations , we recommend closely aligning Slope1 with the DSR to reduce the opportunity for rate arbitrage and ensure that Aave remains competitive. As a result, we propose decreasing Slope1 to 0.5% below the DSR, setting it at 5.5%.
Caveats:
- We do not recommend an update to lower-cap stablecoins on Ethereum V2, as they are currently being deprecated.
- Similar to the previous proposals, we do not recommend a change on bridged USDC (USDC.e/USDbC) on all deployments. This way, they will have a higher Slope1 to motivate the borrowing of native USDC.
Specification
| Market | Asset | Current Slope1 | Recommended Slope1 |
|---|---|---|---|
| Ethereum V2 | USDC | 6.5% | 5.5% |
| Ethereum V2 | USDT | 6.5% | 5.5% |
| Ethereum V2 | DAI | 6.5% | 5.5% |
| Ethereum V3 | USDC | 6.5% | 5.5% |
| Ethereum V3 | USDT | 6.5% | 5.5% |
| Ethereum V3 | FRAX | 6.5% | 5.5% |
| Ethereum V3 | DAI | 6.5% | 5.5% |
| Ethereum V3 | LUSD | 6.5% | 5.5% |
| Ethereum V3 | pyUSD | 6.5% | 5.5% |
| Ethereum V3 | crvUSD | 6.5% | 5.5% |
| Avalanche V3 | USDC | 6.5% | 5.5% |
| Avalanche V3 | USDT | 6.5% | 5.5% |
| Avalanche V3 | DAI | 6.5% | 5.5% |
| Avalanche V3 | FRAX | 6.5% | 5.5% |
| Polygon V3 | USDC | 6.5% | 5.5% |
| Polygon V3 | USDT | 6.5% | 5.5% |
| Polygon V3 | DAI | 6.5% | 5.5% |
| Polygon V3 | EURA | 6.5% | 5.5% |
| Polygon V3 | EURS | 6.5% | 5.5% |
| Polygon V3 | jEUR | 6.5% | 5.5% |
| Optimism V3 | USDC | 9% | 5.5% |
| Optimism V3 | USDT | 6.5% | 5.5% |
| Optimism V3 | DAI | 6.5% | 5.5% |
| Optimism V3 | sUSD | 6.5% | 5.5% |
| Optimism V3 | LUSD | 6.5% | 5.5% |
| Optimism V3 | MAI | 6.5% | 5.5% |
| Arbitrum V3 | USDC | 9% | 5.5% |
| Arbitrum V3 | USDT | 6.5% | 5.5% |
| Arbitrum V3 | DAI | 6.5% | 5.5% |
| Arbitrum V3 | LUSD | 6.5% | 5.5% |
| Arbitrum V3 | FRAX | 6.5% | 5.5% |
| Arbitrum V3 | EURS | 6.5% | 5.5% |
| Base V3 | USDC | 6.5% | 5.5% |
| Metis V3 | m.USDC | 6% | No Change |
| Metis V3 | m.USDT | 6% | No Change |
| Metis V3 | m.DAI | 7% | No Change |
| BNB Chain V3 | USDT | 6.5% | 5.5% |
| BNB Chain V3 | USDC | 6.5% | 5.5% |
| BNB Chain V3 | FDUSD | 6.5% | 5.5% |
| Scroll V3 | USDC | 6.5% | 5.5% |
| Gnosis V3 | WXDAI | 6.5% | 5.5% |
| Gnosis V3 | USDC | 6.5% | 5.5% |
| Gnosis V3 | EURe | 6.5% | 5.5% |
References
- Implementation: AaveV2Ethereum, AaveV3Ethereum, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Base, AaveV3Gnosis, AaveV3Scroll, AaveV3BNB
- Tests: AaveV2Ethereum, AaveV3Ethereum, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Base, AaveV3Gnosis, AaveV3Scroll, AaveV3BNB
- Snapshot: Direct-to-AIP
- Discussion
Copyright
Copyright and related rights waived via CC0.