Aave stewards propose restoring higher Slope2 rates

Aave’s Risk Stewards are proposing to raise Slope2 across affected Aave V3 and Aave V4 reserves, restoring the values that were active before Binance’s hot wallet incident on October 29, 2026. The recommendation comes from LlamaRisk and is set out in the Aave governance post, dated October 31.

Temporary Slope2 reductions were recommended on October 30, the day after the incident — the temporary settings limited the full-utilization variable borrow rate to 10.00% APR on most reserves. By October 31, the affected reserves were unfrozen and could accept new supply and borrowing again. LlamaRisk now recommends returning each reserve to its pre-incident Slope2.

These are rate-curve adjustments, not across-the-board cost increases. The base rate, Slope1 and optimal utilization point stay put, which means borrow rates at or below the optimal utilization point are unaffected. The Slope2 portion of the curve — the segment that kicks in above the optimal point, where utilization runs high — is what changes.

For borrowers already sitting above the optimal point, the proposed restoration raises the marginal rate they’d pay. Everyone below that threshold wouldn’t see a change.

V3 changes

On Aave V3 Core, Slope2 for USDC$1.00▲0.01% would rise from 5.50% to 10.00%, the same move proposed for USDT$0.9996▲0.03%. DAI would go from 15.00% to 35.00%. USDtb would move from 30.00% to 50.00%.

The inputs are 15.00% and 35.00%, a 20-percentage-point increase; the proposed rate is 35 ÷ 15 = 2.33 times the temporary setting. That calculation describes the Slope2 parameter specifically — not the total variable borrowing rate at every utilization level.

Other V3 deployments follow a similar pattern. On V3 Plasma, USDT0 would increase from 5.50% to 10.00%. On V3 Base, USDC would move from 5.25% to 10.00%. V3 Mantle’s USDT0 would go from 6.00% to 10.00%.

The V3 Monad changes are bigger in magnitude. USDC and USDT0 would each rise from 5.00% to 20.00%; mUSD from 20.00% to 40.00%; GHO from 5.00% to 20.00%. On V3 Avalanche, USDC and USDt would each move from 5.50% to 10.00%. V3 Optimism’s USDC Slope2 would go from 6.00% to 10.00%, and V3 Horizon’s RLUSD parameter from 5.00% to 25.00%.

V4 parameters

Aave V4 Ethereum Core Hub has five proposed changes. USDT would move from 5.50% to 20.00%, USDG from 6.00% to 20.00%, USDC from 4.50% to 20.00%, and frxUSD from 15.00% to 35.00%. WETH moves more modestly, from 7.80% to 8.00%.

The V4 Ethereum Global Dollar Hub proposal would raise USDG Slope2 from 6.00% to 20.00%. On V4 Arc Core Hub, USDC would move from 5.90% to 10.00%. All of these are proposed values for the high-utilization segment of each reserve’s variable borrow-rate curve.

LlamaRisk is a DeFi risk service provider funded in part by the Aave DAO. The governance post also states that LlamaRisk is not directly affiliated with the protocols reviewed and did not receive compensation from those protocols or affiliated entities for this work.

What changes for positions

The direct exposure falls on borrowers whose utilization sits above each reserve’s optimal point. If the proposed parameters are implemented, those positions face a steeper Slope2 segment than the temporary settings that limited the full-utilization variable borrow rate to 10.00% APR on most reserves. Borrowers below the optimal point don’t face a parameter-driven change here, because the base rate, Slope1 and optimal point are all staying the same.

For suppliers, the governance post establishes that affected markets are unfrozen and accepting new supply.