Aave lifts Core GHO borrow APR to 4.5% to curb arbitrage and rebuild stablecoin reserves
AI Market Summary
Aave raised GHO borrow APR in its Ethereum Core market to 4.5% to match the sGHO savings rate, removing a DAO-subsidized borrow-and-deposit arbitrage and aiming to rebuild depleted USDC/USDT GSM reserves. The change improves protocol economics but near-term liquidity impact depends on whether borrowers source repayment GHO via GSM swaps that bring stablecoins back into reserves rather than buying on secondary markets.
Impact level
● Medium
Affected assets
AAVE/USDT+3.07%
AI Insight · AAVE/USDTAI Insight
● Neutral
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Aave has raised the GHO borrowing rate on its Ethereum Core market from 4.25% to 4.5% to match the sGHO savings rate and remove an arbitrage gap that was funded by the DAO. TokenLogic proposed the adjustment on Oct. 2, alongside lifting the base rate from 2.75% to 3% and the optimal utilization APR from 4% to 4.25%. The change is intended to encourage borrowers to source repayment GHO via stability modules so reserves can be replenished, according to TokenLogic.
