Aave lowers USDT borrowing rate kink to 92% on Ethereum market

Aave has reduced the utilization threshold for USDT borrowing rates to 92% from 94% in the Ethereum core market. This threshold indicates the percentage of deposited USDT that has been lent out. With this adjustment, borrowing costs will increase more rapidly once 92% of total deposits are utilized. This structure aims to limit excessive borrowing demand by raising loan costs while also promoting additional inflows through higher deposit yields. At a 94% utilization rate, the annual borrowing rate increases to 7% from 4.5%, and it reaches 14.5% when utilization hits 100%. Risk management firm LlamaRisk estimates that lowering the threshold to 92% will leave approximately 57.84 million USDT unlent, based on total deposits of about 2.8922 billion USDT.

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