Aave

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title: “GHO - Increase Borrow Rate” author: “@Marczeller - ACI” discussions: “https://governance.aave.com/t/arfc-gho-increase-borrow-rate/15271”

Simple Summary

This publication proposes increasing the GHO Borrow Rate from 3.00% to 4.72%, slightly below the proposed sDAI rate.

Motivation

By increasing the borrow rate to 4.72%, the goal is to improve the peg by reducing the incentive to mint GHO relative to other stable coins. As a result, GHO’s growth is expected to slow. This publication prioritises returning GHO to peg over growth.

After implementing this proposal, the community can continue with the current plan, direct-to-AIP process for 50 bps increments every 30 days, as long as the GHO peg is outside 0,995<>1,005 monthly average price range, up to 5.5% borrow rate.

Specification

Asset: GHO Contract Address: 0x40D16FC0246aD3160Ccc09B8D0D3A2cD28aE6C2f Current Borrow Rate: 3.00% Proposed Borrow Rate: 4.72% New discounted Borrow Rate: ~3.31%

The discount for stkAave holders remains unchanged at 30%. The Aave Facilitator Bucket Level is to remain at 35.00M units

References

• Implementation: AaveV3Ethereum
• Tests: AaveV3Ethereum
• Snapshot
• Discussion

Copyright

Copyright and related rights waived via CC0.