[ARFC] Increase GHO Borrow Rate 08-03-2024

Title: [ARFC] Increase GHO Borrow Rate 08-03-2024

Author: @ACI (Aave Chan Initiative)

Date: 2024-03-08


With the evolving market dynamics and the increasing popularity of GHO as a stablecoin option, it is necessary to maintain competitiveness by aligning borrowing costs with average market rates. The current GHO borrow rate of 7.22% APR (~7.48% APY) no longer meets this requirement.

AIP-381 allows for 100 bps increases in the GHO borrow rate every 7 days while maintaining rates up to 9.5% APR if the monthly average price of GHO stays outside a 0,995<>1,005 price range. The peg has shown improvement but remains below the target.

Monthly Average Borrow Cost (APR) Stablecoin
10.45% DAI
10.89% LUSD
10.91% USDC
11.87% USDT

Source: TokenLogic | GHO Analytics

Increasing the non-discounted borrow rate of GHO from 7.22% to 7.92% is proposed to remain competitive, increase protocol revenue, and not negatively affect the peg.


  • Current Borrow Rate: 7.22% APR - ~7.48% APY (non-discounted)
  • Proposed Borrow Rate: 7.92% - ~8% APY (non-discounted)
  • Discounted Rates: 30% discount
  • New Discounted Borrow Rate:
    • GHO: ~5.6% APY

If required, ACI will monitor the GHO peg and use authorized discretion for further rate adjustments in coordination with @karpatkey_TokenLogic Aave finance SPs.

Next Steps

  1. Implement the proposed borrow rate increase via a Direct-to-AIP process.
  2. Monitor GHO’s peg and use authorized discretion for further rate adjustments.


This proposal is made independently by the ACI.


Copyright and related rights waived via CC0.


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