Circle has initiated a proposal on the Aave forum to raise the maximum deposit interest rate for USDC to 48.2%.

On April 23, Circle Chief Economist Gordon Liao proposed a motion at the Aave Governance Forum, suggesting an urgent adjustment to the USDC interest rate parameters in the Aave V3 Ethereum main pool to address the situation where the pool’s utilization rate has remained at a very high level of 99.87% for four consecutive days following the KelpDAO attack.
Liao stated that Aave’s current interest rate mechanism has failed to effectively “clear” the market. The current supply in this liquidity pool is $1.89 billion, with the same amount borrowed, and available liquidity is less than $3 million. The borrowing rate remains at the upper limit (about 14%) after the inflection point, and over the past 24 hours, the pool size has shrunk by approximately $60 million—due to repayment funds being used one by one to meet queued withdrawal requests.
Therefore, the Slope 2 parameter in the USDC deposit interest rate curve should be immediately increased from about 10% to 40% through the Risk Steward mechanism, and within 5 to 7 days, governance voting should confirm further upward adjustment of the target to 50%. Meanwhile, the optimal utilization rate will be lowered from 92% to 87% during the transition phase, and after final confirmation, it will be reduced to 85%. According to Liao’s proposal, under the new parameter settings, when utilization reaches 100%, the maximum USDC deposit interest rate will increase from about 12.6% to 48.2%.