On October 21, Aave lowered the USDT reserve utilization threshold on its Ethereum Core market from 94% to 92%, causing borrowing rates to rise more quickly as liquidity tightens. At an identical 94% utilization, the annual borrowing rate increases from 4.5% under the prior curve to 7% under the new curve. Based on LlamaRisk’s reported supply of 2,892.2 million USDT, the shift represents an additional 57.84 million USDT of modeled unborrowed liquidity without creating physical cash. On October 23, actual utilization was estimated at 86.45%, with an observed borrowing rate of about 4.23% and a physical balance of 391.4 million USDT, while withdrawals remained dependent on available liquidity and the health of collateral positions.
Source: Read the original article
