Circle’s Chief Economist Proposes Raising USDC Borrowing Rates on Aave to Alleviate Liquidity Constraints
Source：
www.theblock.co
According to The Block, Gordon Liao, Chief Economist at Circle, submitted a governance discussion proposal to Aave, recommending adjustments to the USDC interest rate parameters in Aave v3’s Ethereum core market to address persistently high utilization and liquidity constraints following the KelpDAO rsETH incident. The proposal suggests initially raising “Slope 2” to 40%, targeting 50%, while lowering the optimal utilization rate to attract more USDC deposits. Some Aave community members have expressed concern that higher borrowing costs could exacerbate liquidation risks for borrowers. Data shows Aave’s current total value locked (TVL) stands at approximately $15.3 billion.
