Aave

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title: “Increase Stablecoin Optimal Borrow Rates” author: “monet-supply + Gauntlet (impl: Alice Rozengarden (@Rozengarden - Aave-chan initiative))” discussions: “https://governance.aave.com/t/arfc-increase-optimal-borrow-rates-for-ethereum-stablecoin-markets/15096/3”

Simple Summary

This AIP propose to modify the parameters of stablecoins across all the Aave pools. Mainly by setting the slope1 to 5%, as well as changing the RF to 25% and Uopt to 90% of some of them.

Motivation

According to research by @monet-supply, the borrowing parameters of the stablecoins on Aave have diverged from the broader market leading to potentials inefficiencies and bad user experience.

Those proposed changes have been approved by both risk providers, with additional suggestion by @Gauntlet.

Stablecoin across all the V2 and V3 markets are concerned by those change. Namely USDC, USDT, LUSD, FRAX, sUSD, DAI, MAI, GUSD, USDP on ethereum (V2 and V3), polygon (V2 and V2), Arbitrum, Gnosis, Optimism, Avalanche (v2 and V3) and Metis. However the changes of RF and Uopt would be more limited, with the Uopt changes being limited to USDC, USDT, DAI and FRAX across all V3s and the RF ones to USDC, USDT and LUSD only for Ethereum V2.

Specification

The following stablecoins would see changes to their parameters: (Blank means no changes)

Market	Asset	slope1	Uopt	RF
Ethv2	USDC	5%		25%
Ethv2	USDT	5%		25%
Ethv2	FRAX	5%
Ethv2	sUSD	5%
Ethv2	GUSD	5%
Ethv2	LUSD	5%		25%
Ethv2	USDP	5%
—	—	—	—	—
Ethv3	USDC	5%	90%
Ethv3	USDT	5%	90%
Ethv3	FRAX	5%	90%
Ethv3	LUSD	5%
—	—	—	—	—
AvaxV2	USDC	5%
AvaxV2	USDT	5%
AvaxV2	DAI	5%
—	—	—	—	—
AvaxV3	USDC	5%	90%
AvaxV3	USDT	5%	90%
AvaxV3	DAI	5%	90%
AvaxV3	MAI	5%
AvaxV3	FRAX	5%	90%
—	—	—	—	—
PolV2	USDC	5%
PolV2	USDT	5%
PolV2	DAI	5%
—	—	—	—	—
PolV3	USDC	5%	90%
PolV3	USDT	5%	90%
PolV3	DAI	5%	90%
PolV3	MAI	5%
—	—	—	—	—
OpV3	USDC	5%	90%
OpV3	USDT	5%	90%
OpV3	DAI	5%	90%
OpV3	sUSD	5%
OpV3	LUSD	5%
OpV3	MAI	5%
—	—	—	—	—
ArbV3	USDC	5%	90%
ArbV3	USDC.e	5%
ArbV3	USDT	5%	90%
ArbV3	DAI	5%	90%
ArbV3	LUSD	5%
ArbV3	FRAX	5%	90%
ArbV3	MAI	5%
—	—	—	—	—
BaseV3	USDC	5%	90%
—	—	—	—	—
MetisV3	USDC	5%	90%
MetisV3	USDT	5%	90%
—	—	—	—	—

References

• Implementation: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Ethereum, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Metis, AaveV3Base
• Tests: AaveV2Ethereum, AaveV2Polygon, AaveV2Avalanche, AaveV3Ethereum, AaveV3Polygon, AaveV3Avalanche, AaveV3Optimism, AaveV3Arbitrum, AaveV3Metis, AaveV3Base
• Snapshot: Slope1, Uopt & RF
• Discussion

Copyright

Copyright and related rights waived via CC0.