Decrease Slope1 Parameter for Stablecoins on Aave V3
01Summary
Chaos Labs proposes reducing the target borrow rate (Slope1 parameter) for stablecoins across Aave V3 to 9.50% on most networks, with 10.50% for bridged stablecoins where native versions exist. This change responds to consistently low stablecoin utilization across all Aave deployments to better align borrowing incentives with market conditions. GHO, USDS, and pyUSD are excluded from this change.
- Type
- parameter change
Key changes
- Reduce Slope1 parameter for native stablecoins (USDC, DAI, USDT, LUSD, FRAX, crvUSD, USDe, sUSD, EURS, FDUSD, m.DAI, m.USDC, m.USDT, DAI.e, USDt, AUSD, EURe, USDC.e on most networks, USD//C on Gnosis, USDbC on Base) from current rates (11.50%-13.00%) to 9.50%(high)
- Reduce Slope1 parameter for bridged stablecoins (USDC.e on Arbitrum, Optimism, and Polygon; USDbC on Base; USD//C on Gnosis) from 12.00%-13.00% to 10.50%(high)
- Reduce Slope1 parameter for Metis stablecoins (m.DAI, m.USDC, m.USDT) and Avalanche DAI.e from 12.00%-12.50% to 9.50%(high)
Notable concerns
- Stablecoin utilization across all Aave deployments remains relatively low with none registering average weighted utilization above 80%, indicating reduced demand for stablecoin borrowing
- The parameter changes are implemented via direct-to-AIP process, bypassing standard governance procedures
- GHO, USDS, and pyUSD are managed separately and excluded from these recommendations, creating inconsistent rate treatment across the stablecoin ecosystem
Generated by Kvorum
02Description
Simple Summary
In light of recent market changes, Chaos Labs recommends setting the target borrow rate for all stablecoins to 9.50%. These changes will be implemented via the direct-to-AIP process.
Motivation
The utilization for stablecoins across Aave has continued to fall, calling for a further reduction in target rates to better align utilization. The chart below shows the average stablecoin utilization on Aave, weighted by the amount of total borrows of each asset.
Utilization across the largest markets remains relatively low; the same has held true on all deployments, with none registering an average weighted utilization above 80%.
As a result, we recommend setting the target rate for all stablecoins to 9.50%; bridged stablecoins on networks where native versions are available should be set to 10.50%. 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 | 11.50% | 9.50% |
| Aave V3 | Ethereum Core | DAI | 11.50% | 9.50% |
| Aave V3 | Ethereum Core | USDT | 11.50% | 9.50% |
| Aave V3 | Ethereum Core | LUSD | 11.50% | 9.50% |
| Aave V3 | Ethereum Core | FRAX | 11.50% | 9.50% |
| Aave V3 | Ethereum Core | crvUSD | 11.50% | 9.50% |
| Aave V3 | Ethereum Core | USDe | 11.50% | 9.50% |
| Aave V3 | Ethereum Prime | USDC | 11.50% | 9.50% |
| Aave V3 | Ethereum EtherFi | USDC | 12.50% | 9.50% |
| Aave V3 | Ethereum EtherFi | FRAX | 12.50% | 9.50% |
| Aave V3 | Arbitrum | DAI | 11.50% | 9.50% |
| Aave V3 | Arbitrum | USDC.e | 12.50% | 10.50% |
| Aave V3 | Arbitrum | USDT | 11.50% | 9.50% |
| Aave V3 | Arbitrum | LUSD | 11.50% | 9.50% |
| Aave V3 | Arbitrum | USDC | 11.50% | 9.50% |
| Aave V3 | Arbitrum | FRAX | 11.50% | 9.50% |
| Aave V3 | Optimism | DAI | 11.50% | 9.50% |
| Aave V3 | Optimism | USDC.e | 12.50% | 10.50% |
| Aave V3 | Optimism | USDT | 11.50% | 9.50% |
| Aave V3 | Optimism | sUSD | 11.50% | 9.50% |
| Aave V3 | Optimism | LUSD | 11.50% | 9.50% |
| Aave V3 | Optimism | USDC | 11.50% | 9.50% |
| Aave V3 | Polygon | DAI | 11.50% | 9.50% |
| Aave V3 | Polygon | USDC.e | 12.50% | 10.50% |
| Aave V3 | Polygon | USDT | 11.50% | 9.50% |
| Aave V3 | Polygon | EURS | 11.50% | 9.50% |
| Aave V3 | Polygon | USDC | 11.50% | 9.50% |
| Aave V3 | Base | USDbC | 12.50% | 10.50% |
| Aave V3 | Base | USDC | 11.50% | 9.50% |
| Aave V3 | Metis | m.DAI | 12.50% | 9.50% |
| Aave V3 | Metis | m.USDC | 12.50% | 9.50% |
| Aave V3 | Metis | m.USDT | 12.50% | 9.50% |
| Aave V3 | Avalanche | DAI.e | 12.00% | 9.50% |
| Aave V3 | Avalanche | USDC | 12.00% | 9.50% |
| Aave V3 | Avalanche | USDt | 12.00% | 9.50% |
| Aave V3 | Avalanche | FRAX | 12.00% | 9.50% |
| Aave V3 | Avalanche | AUSD | 5.50% | 9.50% |
| Aave V3 | Gnosis | USD//C | 13.00% | 10.50% |
| Aave V3 | Gnosis | WXDAI | 11.50% | 9.50% |
| Aave V3 | Gnosis | EURe | 11.50% | 9.50% |
| Aave V3 | Gnosis | USDC.e | 12.00% | 9.50% |
| Aave V3 | BNB | USDC | 11.50% | 9.50% |
| Aave V3 | BNB | USDT | 11.50% | 9.50% |
| Aave V3 | BNB | FDUSD | 11.50% | 9.50% |
| Aave V3 | Scroll | USDC | 11.50% | 9.50% |
| Aave V3 | ZkSync | USDC | 11.50% | 9.50% |
| Aave V3 | ZkSync | USDT | 11.50% | 9.50% |
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, AaveV3Gnosis, AaveV3Scroll, AaveV3BNB, AaveV3ZkSync
- Snapshot: Direct-to-AIP
- Discussion
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal follows Aave's standard direct-to-AIP governance pattern: the on-chain vote executes a small number of 'payload' contracts via a generic execute() fallback call, and the actual parameter changes (Slope1 rate updates across many Aave V3 markets) are encoded inside those payload contracts' bytecode, not visible in the decoded calldata provided here. All three decoded actions are simple parameterless execute() calls to Ethereum-mainnet payload addresses, consistent with the References section which links to per-network Solidity payload implementations (Ethereum, Polygon, Avalanche, Optimism, Arbitrum, Metis, Base, Gnosis, Scroll, BNB, ZkSync, etc.). Because the decoded calldata does not expose the specific interest-rate-strategy parameters being set, I cannot directly verify that each individual asset's Slope1 is being moved to exactly 9.50% or 10.50% as claimed in the specification table. However, there is nothing in the decoded actions that contradicts the description, no unexpected targets, transfers, or role grants, and the number/pattern of execute() calls is typical for this type of multi-market risk-parameter update. Given the opacity of the payload internals, I mark confidence as low rather than flagging a discrepancy, since a low-confidence result should not be treated as a red flag — it simply means the underlying calldata cannot be fully cross-checked against the granular claims in the specification table with the information available.
Generated by Kvorum
04Actions
- Target
- 0xe9dd…296c
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
- Target
- 0x4da7…718a
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
- Target
- 0x272d…96d7
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
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07Forum
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