Stablecoin IR Curve Amendment
01Summary
Proposal to decrease stablecoin borrowing interest rates (Slope1) from 6.5% to 5.5% across multiple Aave deployments on Ethereum V2/V3, Polygon, Avalanche, Optimism, Arbitrum, Base, BNB Chain, Scroll, and Gnosis. The adjustment aligns rates with the DSR decrease from 7% to 6% and recent market convergence around 5.5%, while maintaining higher rates on bridged USDC variants to incentivize native USDC borrowing.
- Type
- parameter change
Key changes
- Reduce Slope1 parameter for stablecoins from 6.5% to 5.5% on Ethereum V2 (USDC, USDT, DAI)(high)
- Reduce Slope1 parameter for stablecoins from 6.5% to 5.5% on Ethereum V3 (USDC, USDT, FRAX, DAI, LUSD, pyUSD, crvUSD)(high)
- Reduce Slope1 parameter for stablecoins from 6.5% to 5.5% on Avalanche V3 (USDC, USDT, DAI, FRAX)(high)
- Reduce Slope1 parameter for stablecoins from 6.5% to 5.5% on Polygon V3 (USDC, USDT, DAI, EURA, EURS, jEUR)(high)
- Reduce Slope1 parameter for stablecoins from 9% to 5.5% on Optimism V3 USDC and from 6.5% to 5.5% for other stablecoins (USDT, DAI, sUSD, LUSD, MAI)(high)
- Reduce Slope1 parameter for stablecoins from 9% to 5.5% on Arbitrum V3 USDC and from 6.5% to 5.5% for other stablecoins (USDT, DAI, LUSD, FRAX, EURS)(high)
- Reduce Slope1 parameter for stablecoins from 6.5% to 5.5% on Base V3 (USDC)(high)
- Reduce Slope1 parameter for stablecoins from 6.5% to 5.5% on BNB Chain V3 (USDT, USDC, FDUSD)(high)
Notable concerns
- Largest rate reductions occur on Optimism and Arbitrum USDC where rates decrease from 9% to 5.5%, a significant 350 basis point cut
- Rate changes align with market conditions and DSR movements but the 100 basis point reduction across most assets could impact protocol revenue from stablecoin borrowing fees
- Exclusion of bridged USDC from rate reductions creates differentiated pricing that may affect user experience across different USDC variants
Generated by Kvorum
02Description
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.
03Mismatch analysis
The proposal description is a standard Aave 'BGD Labs' stablecoin interest-rate curve amendment, listing granular Slope1 rate reductions (6.5%/9% → 5.5%) across many V2/V3 deployments, with explicit carve-outs for deprecated V2 assets, bridged USDC variants, and Metis markets. The decoded calldata, however, consists of only two generic execute() (fallback) calls to two contract addresses on Ethereum mainnet, with no decoded parameters. This is the well-known Aave governance pattern: the top-level AIP calls into 'payload' executor contracts (matching the linked AaveV2Ethereum/AaveV3Ethereum/etc. implementation contracts in the References section) which then internally perform the many per-market rate updates, potentially relaying instructions to other chains via cross-chain governance infrastructure. Because the calldata here is opaque (just two fallback executes with no arguments), it is not possible to directly verify each individual rate change, target market, or asset against the decoded calldata — there simply isn't enough decoded detail to compare line-by-line. However, this two-action execute() pattern is exactly what one expects for this proposal type given the linked implementation contracts, so there is no visible sign of a mismatch, hidden transfer, or unrelated action. Given the limited calldata visibility, confidence in a full reconciliation is low, but nothing in the available decoded actions contradicts or extends beyond the description's stated scope (multi-chain stablecoin IR curve amendments), so it is treated as consistent rather than flagged as a discrepancy of any kind.
Generated by Kvorum
04Actions
- Target
- 0xf01d…cbff
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
- Target
- 0x26c7…c444
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
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07Forum
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