LlamaRisk proposes higher USDe borrowing rates on Aave V3

Proposal overview

LlamaRisk has put forward a recommendation to raise the base variable borrow rate for the USDe stablecoin on five Aave V3 markets – Core, Plasma, Monad, Mantle and Avalanche. The proposal also calls for lowering the Slope1 parameter by one percentage point on each market.

Key changes

• Base borrow rate rises from 5 % to 6 % on all five markets.
• Slope1, which determines how rates increase with utilization, is reduced by 1 %.
• Modeled APR increases range from 13 to 89 basis points, affecting about $323.8 million of USDe debt.
• Current borrow APRs already exceed the 4.72 % supply APY for sUSDe.

Reported details

The September 9 snapshot shows the following utilization and APR figures:

What is confirmed

The recommendation is a formal proposal from LlamaRisk and would be applied through Aave’s Risk Steward process. The numbers above reflect the modeled impact at the utilization levels captured on September 9.

Uncertainties

Borrow rates can change as market utilization shifts, so the exact APR borrowers will pay may differ from the modeled figures. The proposal’s effect on the overall sUSDe yield loop depends on how quickly borrowers adjust their positions.

Impact on leveraged sUSDe loops

Higher borrowing costs aim to reduce the practice of recycling USDe into the yield‑bearing sUSDe token to capture the spread between staking yield and borrowing cost. If loops unwind, remaining sUSDe holders could see the supply APY move toward the projected 5.3 %.

Implementation timeline

If accepted, the changes would be enacted via the Risk Steward mechanism, but no specific activation date is provided in the proposal.

Sources

• CryptoSlate