ARFC proposal suggests raising the interest rate parameters of the Aave v3 Ethereum mainnet USDC liquidity pool.

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ME News, April 23 (UTC+8), Circle Chief Economist Gordon Liao submitted an ARFC proposal stating that the USDC liquidity pool on the Aave v3 Ethereum mainnet has been near 100% utilization for about four consecutive days. The borrowing rate has remained at the upper limit of approximately 14% but has failed to clear the market. Liquidity remains tight, and both deposit and borrowing scales have shrunk simultaneously.
The proposal states that the situation is mainly driven by about $300 million in borrowing demand following the rsETH incident, as well as the borrowers' insensitivity to interest rates. The proposal recommends increasing Slope 2 from approximately 10% to 50%, with an intermediate transition to 40%, while lowering the optimal utilization rate from 92% to 85%, in order to raise the interest rate ceiling and attract liquidity back, allowing the pool to restore clearing through price mechanisms. Additionally, the proposal suggests suspending or fixing the Slope 2 risk oracle during abnormal periods, with LlamaRisk and Aave Labs implementing temporary parameters first, and completing governance confirmation within 5 to 7 days. (Source: MLion)
AAVE5.98%
USDC0.02%
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