Stablecoin IR Curve Amendment
01Summary
Proposal to reduce stablecoin borrowing interest rates (Slope1) from 9% to 6.5% across Aave V2 and V3 deployments on multiple chains (Ethereum, Polygon, Avalanche, Optimism, Arbitrum, Base, BNB Chain, Scroll, and Gnosis). This aligns rates with anticipated MakerDAO DSR decrease from 8% to 7%, reducing arbitrage opportunities and maintaining Aave's competitiveness. Metis deployment and bridged USDC variants are excluded from changes.
- Type
- parameter change
Key changes
- Reduce Slope1 parameter for USDC, USDT, and DAI on Ethereum V2 from 9% to 6.5%(high)
- Reduce Slope1 parameter for USDC, USDT, FRAX, DAI, LUSD, pyUSD, and crvUSD on Ethereum V3 from 9% to 6.5%(high)
- Reduce Slope1 parameter for USDC, USDT, DAI, and FRAX on Avalanche V3 from 9% to 6.5%(high)
- Reduce Slope1 parameter for USDC, USDT, DAI, EURA, EURS, and jEUR on Polygon V3 from 9% to 6.5%(high)
- Reduce Slope1 parameter for USDC, USDT, DAI, sUSD, LUSD, and MAI on Optimism V3 from 9% to 6.5%(high)
- Reduce Slope1 parameter for USDC, USDT, DAI, LUSD, FRAX, and EURS on Arbitrum V3 from 9% to 6.5%(high)
- Reduce Slope1 parameter for USDC on Base V3 from 9% to 6.5%(high)
- Reduce Slope1 parameter for USDT, USDC, and FDUSD on BNB Chain V3 from 9% to 6.5%(high)
Notable concerns
- Rate reduction may impact lending yields for suppliers of stablecoin collateral
- Implementation spans 9 blockchain networks with multiple stablecoin assets, requiring careful execution across all deployments
Generated by Kvorum
02Description
Simple Summary
A proposal to decrease stablecoin Interest Rate parameters across all Aave deployments.
Motivation
Following the anticipated decrease in DSR — from 8% to 7% — we believe 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 13% to 10% in April.
The new parameters went into effect on May 6, 2024, and thus far have helped improve rate stability and utilization rates. As part of our ongoing monitoring of broader markets, we note that MakerDAO is in the process of reducing the DAI Savings Rate, which could impact stablecoin rates throughout DeFi.
Following our methodology laid out in previous recommendations, we recommend closely aligning Slope1 with the DSR to reduce the opportunity of rate arbitrage and ensure that Aave remains competitive. As a result, we propose decreasing Slope1 to 0.5% below the DSR, setting it at 6.5%.
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 | 9% | 6.5% |
| Ethereum V2 | USDT | 9% | 6.5% |
| Ethereum V2 | DAI | 9% | 6.5% |
| Ethereum V3 | USDC | 9% | 6.5% |
| Ethereum V3 | USDT | 9% | 6.5% |
| Ethereum V3 | FRAX | 9% | 6.5% |
| Ethereum V3 | DAI | 9% | 6.5% |
| Ethereum V3 | LUSD | 9% | 6.5% |
| Ethereum V3 | pyUSD | 9% | 6.5% |
| Ethereum V3 | crvUSD | 9% | 6.5% |
| Avalanche V3 | USDC | 9% | 6.5% |
| Avalanche V3 | USDT | 9% | 6.5% |
| Avalanche V3 | DAI | 9% | 6.5% |
| Avalanche V3 | FRAX | 9% | 6.5% |
| Polygon V3 | USDC | 9% | 6.5% |
| Polygon V3 | USDT | 9% | 6.5% |
| Polygon V3 | DAI | 9% | 6.5% |
| Polygon V3 | EURA | 9% | 6.5% |
| Polygon V3 | EURS | 9% | 6.5% |
| Polygon V3 | jEUR | 9% | 6.5% |
| Optimism V3 | USDC | 9% | 6.5% |
| Optimism V3 | USDT | 9% | 6.5% |
| Optimism V3 | DAI | 9% | 6.5% |
| Optimism V3 | sUSD | 9% | 6.5% |
| Optimism V3 | LUSD | 9% | 6.5% |
| Optimism V3 | MAI | 9% | 6.5% |
| Arbitrum V3 | USDC | 9% | 6.5% |
| Arbitrum V3 | USDT | 9% | 6.5% |
| Arbitrum V3 | DAI | 9% | 6.5% |
| Arbitrum V3 | LUSD | 9% | 6.5% |
| Arbitrum V3 | FRAX | 9% | 6.5% |
| Arbitrum V3 | EURS | 9% | 6.5% |
| Base V3 | USDC | 9% | 6.5% |
| Metis V3 | m.USDC | 6% | No Change |
| Metis V3 | m.USDT | 6% | No Change |
| Metis V3 | m.DAI | 6% | No Change |
| BNB Chain V3 | USDT | 9% | 6.5% |
| BNB Chain V3 | USDC | 9% | 6.5% |
| BNB Chain V3 | FDUSD | 9% | 6.5% |
| Scroll V3 | USDC | 9% | 6.5% |
| Gnosis V3 | WXDAI | 9% | 6.5% |
| Gnosis V3 | USDC | 9% | 6.5% |
| Gnosis V3 | EURe | 9% | 6.5% |
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.
03Mismatch analysis
The proposal description details a broad set of Slope1 interest-rate reductions (9% → 6.5%) across many Aave V2/V3 deployments on multiple chains, with explicit exceptions (Metis V3, bridged USDC variants). The decoded on-chain actions, however, only show two generic execute() calls (fallback functions with no decoded arguments) targeting two contract addresses on Ethereum mainnet. This is consistent with Aave's standard governance pattern where a mainnet proposal executes one or more 'payload' contracts whose bytecode contains the actual parameter changes and/or cross-chain messages to reflect updates on other networks — the proposal's 'Implementation' section links to the exact source files for each network's payload contract, which is the standard way Aave documents these opaque execute() calls. Because the calldata itself carries no decoded parameters (rates, assets, or target markets), I cannot directly verify that each specific rate change (e.g., 6.5% Slope1 for each listed asset) matches what the two payload contracts will execute on-chain. There is no evidence of a mismatch — the structure (two execute() calls consistent with a multi-network AIP payload pattern) aligns with the description's scope — but the lack of argument-level detail in the decoded calldata prevents high-confidence line-by-line verification of every listed market/asset change. Given no contradictory evidence and this being the expected/standard format for this proposal type, I assess it as consistent, but with low confidence due to the opacity of the fallback-only calldata.
Generated by Kvorum
04Actions
- Target
- 0x8c8a…dca8
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
- Target
- 0x9c5a…a944
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
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07Forum
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