LlamaRisk proposes Aave stablecoin rate-model changes

LlamaRisk posted targeted Interest Rate Model changes for stablecoins across Aave V3 on September 2, including a 100-basis-point increase to USDe’s base rate and a 20-basis-point increase to Slope1 for other stablecoins. The full recommendation is on the Aave Governance Forum.

For stablecoins other than USDe, LlamaRisk recommends raising Slope1 by 20 bps across 15 reserves on 11 deployments — reserves carrying approximately $5.83 billion in aggregate debt.

The USDe adjustment is split by deployment. LlamaRisk recommends lifting the base variable rate from 2.00% to 3.00% on Aave V3 Core, Plasma, Monad, Mantle, and Avalanche — all five deployments carrying USDe.

On Aave V3 Core and Aave V3 Avalanche specifically, that 100-bps base-rate increase comes paired with a 100-bps Slope1 reduction. Current Slope1 on those two markets is 4.00%; the recommendation takes it to 3.00%. LlamaRisk says the pairing is designed to keep the borrow APR within a 5.25%-to-5.5% target range.

The governance post places the USDe move within a broader shift toward a 5.25% base rate, aligning USDe borrowing with Ethena’s native staking rate. The immediate ask is narrower: a 100-bps step from 2.00% to 3.00% across the five named deployments.

The proposal follows two implemented rate moves in quick succession. The base rate moved from 0.00% to 1.00% on August 28, then from 1.00% to 2.00% on September 1.

The data point behind the proposal is debt migration on Aave V3 Core. Eighty-six accounts reduced their USDe debt by an aggregate $107.0 million. Of that, $56.8 million was replaced by USDC or USDT borrowing from those same accounts — 53.1% of the observed USDe reduction, per the proposal’s “USDe Debt Migration” table.

For price context, CoinGecko listed UUSDT$1.0000▲0.03% at $0.999606 and UUSDC$0.9999▲0.01% at $0.999809 on September 3; those prices do not establish the reason for Aave’s proposed changes.

For USDC and USDT on Aave V3 Core, current Slope1 sits at 4.10%, with a recommended rate of 4.30%.

The practical effect, if implemented: USDe borrowers face a higher base-rate input, while borrowers of the other affected stablecoins face a higher Slope1. The Core and Avalanche USDe curves are the exception — Slope1 there drops 100 bps even as the base rate climbs.