Aave Increases GHO Borrowing Rate to Address Stablecoin Reserve Shortage
- Aave’s Ethereum Core market now lists a borrowing rate of 4.5% for GHO, up from 4.25% as of October 2.
- The increase aims to replenish the depleted USDC GHO Stability Module, which was reported low on reserves.
- As of October 5, approximately 116 million GHO had been borrowed, with daily snapshots indicating stable borrowing levels.
- TokenLogic proposed a new base rate of 3%, increasing from 2.75%, alongside an optimal utilization APR of 4.25%.
- Borrowers can acquire GHO either through the secondary market or by exchanging USDC or USDT via a GSM.
The adjustment in borrowing rates is intended to incentivize borrowers to bring stablecoins into the reserves, enhancing liquidity for future withdrawals and conversions.
The increased borrowing rate could potentially stabilize liquidity, with the aim of restoring reserves that currently lack sufficient USDC or USDT for conversion needs.Source
