Increase Borrow Slope1 to all Stablecoins across all Aave Instances
Increase Borrow Slope1 to all Stablecoins across all Aave Instances
Author
Aave Chan Initiative
Creator
0x57ab7ee15cE5ECacB1aB84EE42D5A9d0d8112922
Simple Summary
This proposal recommends increasing the borrow slope1 parameter for stablecoins across all Aave V3 Instances and Aave V2 on mainnet to 12.5%. This adjustment aims to align interest rate models with the updated Stable Debt Reserve (SDR) strategy, promoting sustainability, better risk management, and optimal utilization of the protocol’s resources.
Motivation
The current market environment presents a unique opportunity to optimize Aave’s interest rate parameters. With the introduction of sUSDe as E-Mode collateral and general market sentiment leading to higher desire for borrowing, we are seeing significantly higher utilisation in the stablecoin market. This adjustment to the borrow slope1 will better align Aave’s interest rates with prevailing market conditions, potentially leading to:
- Increased protocol revenue through better rate optimization
- Enhanced capital efficiency by maintaining competitive lending rates at lower volatility.
Additionally, this change will ensure appropriate risk compensation for stablecoin lenders.
Specification
Market | Asset | Current Slope1 | Recommended Slope1 | Current Slope2 | Recommended Slope2 |
---|---|---|---|---|---|
Ethereum V2 | USDC | 5.5% | 12.5% | 60% | - |
Ethereum V2 | USDT | 5.5% | 12.5% | 100% | - |
Ethereum V2 | DAI | 5.5% | 12.5% | 75% | - |
Ethereum V3 Core | USDC | 5.5% | 12.5% | 75% | 35% |
Ethereum V3 Core | USDT | 5.5% | 12.5% | 75% | 35% |
Ethereum V3 Core | USDe | 9.0% | 12.5% | 75% | 50% |
Ethereum V3 Core | FRAX | 5.5% | 12.5% | 75% | 40% |
Ethereum V3 Core | DAI | 5.5% | 12.5% | 75% | 35% |
Ethereum V3 Core | LUSD | 5.5% | 12.5% | 87% | 50% |
Ethereum V3 Core | PYUSD | 5.5% | 12.5% | 80% | 50% |
Ethereum V3 Core | crvUSD | 5.5% | 12.5% | 80% | 50% |
Ethereum V3 Prime | USDC | 5.5% | 12.5% | 60% | 35% |
Ethereum V3 EtherFi | USDC | 6.5% | 12.5% | 60% | 40% |
Ethereum V3 EtherFi | PYUSD | 5.5% | 12.5% | 80% | 40% |
Ethereum V3 EtherFi | FRAX | 5.5% | 12.5% | 80% | 40% |
Avalanche V3 | USDC | 5.5% | 12.5% | 60% | 40% |
Avalanche V3 | USDT | 5.5% | 12.5% | 75% | 40% |
Avalanche V3 | DAI | 5.5% | 12.5% | 75% | 40% |
Avalanche V3 | FRAX | 5.5% | 12.5% | 75% | 40% |
Polygon V3 | USDC | 5.5% | 12.5% | 60% | 40% |
Polygon V3 | USDC.e | 10.0% | 13.5% | 80% | 40% |
Polygon V3 | USDT | 5.5% | 12.5% | 75% | 40% |
Polygon V3 | DAI | 5.5% | 12.5% | 75% | 40% |
Polygon V3 | EURS | 5.5% | 12.5% | 75% | 50% |
Optimism V3 | USDC | 5.5% | 12.5% | 60% | 40% |
Optimism V3 | USDT | 5.5% | 12.5% | 75% | 40% |
Optimism V3 | DAI | 5.5% | 12.5% | 75% | 40% |
Optimism V3 | sUSD | 5.5% | 12.5% | 75% | 50% |
Optimism V3 | LUSD | 5.5% | 12.5% | 87% | 50% |
Optimism V3 | USDC.e | 6.5% | 13.5% | 80% | 40% |
Arbitrum V3 | USDC | 5.5% | 12.5% | 60% | 40% |
Arbitrum V3 | USDC.e | 6.5% | 13.5% | 80% | 40% |
Arbitrum V3 | USDT | 5.5% | 12.5% | 75% | 40% |
Arbitrum V3 | DAI | 5.5% | 12.5% | 75% | 40% |
Arbitrum V3 | LUSD | 5.5% | 12.5% | 87% | 50% |
Arbitrum V3 | FRAX | 5.5% | 12.5% | 75% | 40% |
Arbitrum V3 | GHO | 12% | 12.5% | 65% | 40% |
Base V3 | USDC | 5.5% | 12.5% | 60% | 40% |
Base V3 | USDbC | 10.0% | 13.5% | 80% | 40% |
Metis V3 | m.USDC | 6.0% | 12.5% | 60% | 40% |
Metis V3 | m.USDT | 6.0% | 12.5% | 75% | 40% |
Metis V3 | m.DAI | 7.0% | 12.5% | 75% | 50% |
BNB Chain V3 | USDT | 5.5% | 12.5% | 75% | 40% |
BNB Chain V3 | USDC | 5.5% | 12.5% | 60% | 40% |
BNB Chain V3 | FDUSD | 5.5% | 12.5% | 75% | 40% |
Scroll V3 | USDC | 5.5% | 12.5% | 60% | 40% |
Gnosis V3 | WXDAI | 5.5% | 12.5% | 75% | 40% |
Gnosis V3 | USDC | 5.5% | 12.5% | 75% | 40% |
Gnosis V3 | EURe | 5.5% | 12.5% | 75% | 50% |
Gnosis V3 | USDC.e | 9% | 13.5% | 75% | 40% |
ZKSync V3 | USDC | 5.5% | 12.5% | 60% | 40% |
ZKSync V3 | USDT | 5.5% | 12.5% | 60% | 40% |
References
- Implementation: AaveV2Ethereum, AaveV3Ethereum, AaveV3EthereumLido, AaveV3EthereumEtherFi, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Metis, AaveV3Base, AaveV3Gnosis, AaveV3Scroll, AaveV3BNB, AaveV3ZkSync
- Tests: AaveV2Ethereum, AaveV3Ethereum, AaveV3EthereumLido, AaveV3EthereumEtherFi, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Metis, AaveV3Base, AaveV3Gnosis, AaveV3Scroll, AaveV3BNB, AaveV3ZkSync
- Snapshot: Direct-to-AIP
- Discussion
Copyright
Copyright and related rights waived via CC0.