[ARFC] Stablecoin IR Curve Amendment on Aave V2 and V3
Vote Result: YES - AGGRESSIVE
Rationale
This proposal will align rates with market demand and brings Aave in line with other protocols, enabling Aave to be competitive in this market. The recommendation to increase rates to 14% makes sense, since this will mitigate short-term rate volatility (of which there is a lot at the moment) and will discourage deviations above uOptimal, which has been happening quite a lot recently. Slope1 can be reduced as and when sDAI rates revert or decrease over time, but it is more important to mitigate volatility at the moment and ensure Aave’s competitiveness with the DSR, Spark, and other protocols. Increasing the borrow rate will also increase revenue for the protocol, which is key to capture in this market. Increasing uOptimal to 92% also makes sense given that the utilisation rate is above the current uOptimal and has remained so over the last few months.
Therefore, we will vote YES in favour of the AGGRESSIVE option.