Stablecoin IR Curves Updates
01Summary
Proposal to increase the Slope1 parameter (lower borrow rate curve) from 5% to 6% for stablecoins across all Aave V2 and V3 deployments (Ethereum, Avalanche, Polygon, Optimism, Arbitrum, Base, Metis, and Gnosis) to stabilize borrowing rates and achieve equilibrium utilization below the optimal point. Some assets with existing 7% Slope1 (USDC.e, USDbC) remain unchanged.
- Type
- parameter change
Key changes
- Increase Slope1 parameter from 5% to 6% for majority of stablecoin markets across all deployments (USDC, USDT, DAI, FRAX, LUSD, sUSD, GUSD, USDP, MAI, xDAI)(high)
- Assets with existing 7% Slope1 (USDC.e on Polygon V3, Optimism V3, Arbitrum V3, and USDbC on Base V3) remain unchanged(medium)
Notable concerns
- The proposal aims to address continued volatility in stablecoin borrow rates following a previous increase (AIP-375)
- Additional monitoring and recommendations may be required following implementation based on usage and equilibrium rate observations
Generated by Kvorum
02Description
Simple Summary
A proposal to increase stablecoin Interest Rate parameters across all Aave deployments.
Motivation
Following the implementation of AIP-375 to increase stablecoin borrow rates across Aave V2 and V3 deployments, we continue to observe volatility in borrow rates across Aave deployments. As we highlighted in the recent proposal, we recommend a more aggressive increase of the Slope1 parameter to stabilize borrows under the UOptimal point.
Adjust Slope1 of stablecoins to 6%
The analysis indicates a necessity for further refinement of stablecoin interest rates, to achieve a more predictable and stable borrowing rate with an equilibrium utilization under the UOptimal point. Therefore, we propose increasing Slope1 to 6% for stablecoins across all Aave deployments, in this iteration. Following this increase, we will continue monitoring the usage and equilibrium rate and make additional recommendations as necessary.
Specification
| Market | Asset | Current Slope1 | Rec Slope1 |
|---|---|---|---|
| Ethereum V2 | USDC | 5% | 6% |
| Ethereum V2 | USDT | 5% | 6% |
| Ethereum V2 | DAI | 5% | 6% |
| Ethereum V2 | FRAX | 5% | 6% |
| Ethereum V2 | sUSD | 5% | 6% |
| Ethereum V2 | GUSD | 5% | 6% |
| Ethereum V2 | LUSD | 5% | 6% |
| Ethereum V2 | USDP | 5% | 6% |
| Ethereum V3 | USDC | 5% | 6% |
| Ethereum V3 | USDT | 5% | 6% |
| Ethereum V3 | DAI | 5% | 6% |
| Ethereum V3 | FRAX | 5% | 6% |
| Ethereum V3 | LUSD | 5% | 6% |
| Avalanche V2 | USDC | 5% | 6% |
| Avalanche V2 | USDT | 5% | 6% |
| Avalanche V2 | DAI | 5% | 6% |
| Avalanche V3 | USDC | 5% | 6% |
| Avalanche V3 | USDT | 5% | 6% |
| Avalanche V3 | DAI | 5% | 6% |
| Avalanche V3 | MAI | 5% | 6% |
| Avalanche V3 | FRAX | 5% | 6% |
| Polygon V2 | USDC | 5% | 6% |
| Polygon V2 | USDT | 5% | 6% |
| Polygon V2 | DAI | 5% | 6% |
| Polygon V3 | USDC.e | 7% | No Change |
| Polygon V3 | USDC | 5% | 6% |
| Polygon V3 | USDT | 5% | 6% |
| Polygon V3 | DAI | 5% | 6% |
| Polygon V3 | MAI | 5% | 6% |
| Optimism V3 | USDC.e | 7% | No Change |
| Optimism V3 | USDC | 5% | 6% |
| Optimism V3 | USDT | 5% | 6% |
| Optimism V3 | DAI | 5% | 6% |
| Optimism V3 | sUSD | 5% | 6% |
| Optimism V3 | LUSD | 5% | 6% |
| Optimism V3 | MAI | 5% | 6% |
| Arbitrum V3 | USDC | 5% | 6% |
| Arbitrum V3 | USDC.e | 7% | No Change |
| Arbitrum V3 | USDT | 5% | 6% |
| Arbitrum V3 | DAI | 5% | 6% |
| Arbitrum V3 | LUSD | 5% | 6% |
| Arbitrum V3 | FRAX | 5% | 6% |
| Arbitrum V3 | MAI | 5% | 6% |
| Base V3 | USDC | 5% | 6% |
| Base V3 | USDbC | 7% | No Change |
| Metis V3 | USDC | 5% | 6% |
| Metis V3 | USDT | 5% | 6% |
| Gnosis V3 | USDC | 5% | 6% |
| Gnosis V3 | xDAI | 5% | 6% |
References
- Implementation: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Ethereum, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Metis, AaveV3Base, AaveV3Gnosis
- Tests: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Ethereum, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Metis, AaveV3Base, AaveV3Gnosis
- Snapshot
- Discussion
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this ARFC.
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal description details a specific, well-scoped parameter change (raising Slope1 from 5% to 6% for a defined list of stablecoins across 11 Aave deployments, explicitly excluding a few bridged-asset markets already at 7%). However, the decoded calldata only shows two generic execute() fallback calls to two contract addresses on Ethereum mainnet, with no visible sub-calls, parameters, or target reserves. This is the standard pattern for BGD Labs/Aave governance proposals, where the top-level governance executor calls execute() on payload contracts that internally delegatecall to per-market logic (and potentially trigger cross-chain execution via bridge adapters for L2 deployments). Because the actual parameter-setting logic is not exposed in the decoded calldata (only opaque execute() calls), it is not possible to directly verify that the Slope1 values match 6% for each listed market, or that the excluded markets are indeed left unchanged. This is a limitation of the decoded data rather than evidence of a mismatch — the pattern is consistent with legitimate, previously-used Aave governance payloads (as linked in the References section for each chain). Given the inability to inspect the nested calls, I set confidence to low and do not flag any specific value/target discrepancies, since doing so would require speculation beyond what the calldata shows. No claims in the description are contradicted by the visible calldata, and the general shape (two mainnet payload executions) is typical for a proposal that fans out changes to multiple chains via linked implementation contracts referenced in the proposal's own documentation.
Generated by Kvorum
04Actions
- Target
- 0x91c2…337a
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
- Target
- 0x8b97…36a9
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
No forum thread is confidently linked to this proposal.
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