# \[ARFC\] Increase GHO Borrow Rate 08-03-2024
**URL:** https://governance.aave.com/t/arfc-increase-gho-borrow-rate-08-03-2024/16885
**Category:** Governance
**Created:** [March 8, 2024, 11:39am UTC](https://governance.aave.com/t/arfc-increase-gho-borrow-rate-08-03-2024/16885 "2024-03-08T11:39:17Z")
**Posts on this page:** 2
**Page:** 1
### Author:  [@MarcZeller](https://governance.aave.com/u/MarcZeller)
#### Post date: [March 8, 2024, 11:39am UTC](https://governance.aave.com/t/arfc-increase-gho-borrow-rate-08-03-2024/16885/1 "2024-03-08T11:39:18Z")
## **Title:** [ARFC] Increase GHO Borrow Rate 08-03-2024
## **Author:** @ACI (Aave Chan Initiative)
## **Date:** 2024-03-08
* * *
## Motivation
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: [https://aave.tokenlogic.com.au/stablecoin-rates](https://aave.tokenlogic.com.au/stablecoin-rates)
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.
## Specification
- **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.
## Disclaimer
This proposal is made independently by the ACI.
## Copyright
Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).
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### Author:  [@system](https://governance.aave.com/u/system)
#### Post date: [April 7, 2024, 11:39am UTC](https://governance.aave.com/t/arfc-increase-gho-borrow-rate-08-03-2024/16885/2 "2024-04-07T11:39:46Z")
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