# \[ARFC\] Polygon v2 Borrow Rate Adjustments **URL:** \ **Category:** Governance\ **Created:** [April 4, 2024, 7:36pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252 "2024-04-04T19:36:12Z")\ **Posts on this page:** 13\ **Page:** 1
**Author:** ![karpatkey\_TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/karpatkey_tokenlogic/32/4737_2.png) [@karpatkey\_TokenLogic](https://governance.aave.com/u/karpatkey_TokenLogic)\ **Post date:** [April 4, 2024, 7:36pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/1 "2024-04-04T19:36:12Z")
* * * Title: [ARFC] Polygon v2 Borrow Rate Adjustments Author: @karpatkey_TokenLogic & @ChaosLabs Created: 2024-04-04 * * * # Summary This publication proposes gradually revising the Borrow Rate on Polygon v2 to provide further encouragement for users to migrate to Aave v3. # Motivation Over the last [8 months](https://governance-v2.aave.com/governance/proposal/284/) the Reserve Factor (RF) on Polygon v2 has gradually increased from as low as 21.00% to 99.99%. As a result, deposit yield converged to zero and the capital efficiency of Aave v2 has been reduced on Polygon. With the RF now approaching the maximum across all reserves, this publication seek to gradually increase the cost of capital via periodic borrow rate adjustments, every two weeks in a predictable fashion. Based upon recent borrow rates behaviour, the market has demonstrated the ability to withstand periods of elevated borrowing rates. ## Non Frozen Assets For non-frozen assets, this proposal recommends increasing the Slope1 parameter by 75bps every two weeks, or 1.5% per month, to encourage further migration of users from v2 to v3. The outcome of this [vote](https://snapshot.org/#/aave.eth/proposal/0xe2dd228640c3cad93f5418c40c4b5743b3c6c85aa0aae9eee53cbdbca2ed5c2d) has been taken into consideration when drafting the current IR parameters included in this proposal. The Slope2 parameter is to be revised to discourage utilisation exceeding the Uoptimal value. Note, several reserves are experiencing utilisation marginally exceeding Uoptimal. As utilisation of each reserve decreases over time, the Uoptimal will be periodically lowered to discourage new debt positions emerging. Any proposed changes to the Uoptimal parameter will be presented via a separate ARFC. Upon implementation, this change will not trigger liquidation of any users funds and will gradually increase the cost for users who remain on v2. Please note, there is a Migration Tool that was developed by BGD to aid users migrating from v2 to v3. Assets in scope: DAI, MATIC, wBTC, wETH, USDC and USDT. ## Frozen Assets Each frozen reserve contains a small portion of funds with a very minimal amount of debt. For these assets we recommend a more aggressive implementation: reduce the Uoptimal to 10.00%, revise Slope1 to 50.00% and Slope2 to 500.00% - with the exception of BAL, which receives a Uoptimal of 20% due to current utilisation being around 15%. Assets in scope: BAL, CRV, DPI, GHST, LINK and SUSHI. # Specification The following parameters are to be updated as follows: | Asset | Current Slope1 | Proposed Slope1 | Current Uoptimal | Proposed Uoptimal | Current Slope2 | Proposed Slope2 | | --- | --- | --- | --- | --- | --- | --- | | BAL | 27.00% | 50.00% | 65.00% | 20.00% | 236.00% | 500.00% | | CRV | 17.00% | 50.00% | 25.00% | 10.00% | 392.00% | 500.00% | | DAI | 12.00% | 12.75% | 71.00% | 71.00% | 105.00% | 200.00% | | GHST | 7.00% | 50.00% | 23.00% | 10.00% | 413.00% | 500.00% | | LINK | 7.00% | 50.00% | 25.00% | 10.00% | 402.00% | 500.00% | | USDT | 12.00% | 12.75% | 52.00% | 52.00% | 236.00% | 236.00% | | wBTC | 4.00% | 4.75% | 37.00% | 37.00% | 536.00% | 536.00% | | wETH | 4.00% | 4.75% | 40.00% | 40.00% | 167.00% | 200.00% | | wMATIC | 6.00% | 6.75% | 48.00% | 48.00% | 440.00% | 500.00% | | wUSDC | 12.00% | 12.75% | 77.00% | 77.00% | 134.00% | 200.00% | Subject to approval from @ChaosLabs, a subsequent proposal will be submitted every two weeks. # Next Steps 1. Gather feedback from the community. 2. If consensus is reached on this ARFC, escalate this proposal to the Snapshot stage. 3. If Snapshot outcome is YAE, escalate this proposal to AIP stage 4. Review, and where applicable, submit an AIP every 2 weeks # Disclosure TokenLogic and karpatkey receive no payment for this proposal. TokenLogic and karpatkey are both delegates within the Aave community. # Copyright Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/). ---
**Author:** ![karpatkey\_TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/karpatkey_tokenlogic/32/4737_2.png) [@karpatkey\_TokenLogic](https://governance.aave.com/u/karpatkey_TokenLogic)\ **Post date:** [April 10, 2024, 5:53am UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/2 "2024-04-10T05:53:22Z")
The proposal has been advanced to [Snapshot](https://snapshot.org/#/aave.eth/proposal/0x95643085ee16eb0eaa4110a9f0ea8223009f9521e596e1a958303705a5001363) for voting. **Start date** Apr 11, 2024 **End date** Apr 14, 2024 ---
**Author:** ![karpatkey\_TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/karpatkey_tokenlogic/32/4737_2.png) [@karpatkey\_TokenLogic](https://governance.aave.com/u/karpatkey_TokenLogic)\ **Post date:** [April 18, 2024, 2:55pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/3 "2024-04-18T14:55:27Z")
After the snapshot successfully passed signalling this the right direction, valuable feedback was received on the proposed slope 2 rates. These parameters have been reviewed and brought down to 134%. We will present them as such in the upcoming AIP for the DAO to vote for. Further to the above, the 12.75% Slope1 was revised to 9.75% which incorporates the intended 0.75% increase as proposed and also the revised v3 and v2 Slope1 parameter presented in this forum [post](https://governance.aave.com/t/arfc-stablecoin-ir-curve-amendment-on-aave-v2-and-v3-04-22-2024/17450). ---
**Author:** ![karpatkey\_TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/karpatkey_tokenlogic/32/4737_2.png) [@karpatkey\_TokenLogic](https://governance.aave.com/u/karpatkey_TokenLogic)\ **Post date:** [May 9, 2024, 5:43pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/5 "2024-05-09T17:43:05Z")
The next round of Borrow Rate adjustments are shown below: | Asset | Current Slope1 | Proposed Slope1 | | --- | --- | --- | | DAI | 9.75% | 10.50% | | USDT | 9.75% | 10.50% | | wBTC | 4.75% | 5.50% | | wETH | 4.75% | 5.50% | | wUSDC | 9.75% | 10.50% | Only the Slope1 parameter is increased by 0.75% for each non frozen asset. ---
**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\ **Post date:** [June 8, 2024, 5:43pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/6 "2024-06-08T17:43:10Z")
This topic was automatically closed 30 days after the last reply. New replies are no longer allowed. ---
**Author:** ![ACI](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/aci/32/4780_2.png) [@ACI](https://governance.aave.com/u/ACI)\ **Post date:** [June 24, 2024, 3:31pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/7 "2024-06-24T15:31:01Z")
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**Author:** ![Luigy](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/luigy/32/6253_2.png) [@Luigy](https://governance.aave.com/u/Luigy)\ **Post date:** [June 24, 2024, 3:54pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/8 "2024-06-24T15:54:03Z")
The next round of Borrow Rate adjustments are shown below: | Market | Asset | Current Slope1 | New Slope1 | | --- | --- | --- | --- | | Polygon V2 | DAI | 10.50% | 11.25% | | Polygon V2 | USDT | 10.50% | 11.25% | | Polygon V2 | wBTC | 5.50% | 6.25% | | Polygon V2 | wETH | 5.50% | 6.25% | | Polygon V2 | wUSDC | 10.50% | 11.25% | | Polygon V2 | wMATIC | 7.50% | 8.25% | ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [July 12, 2024, 3:29pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/9 "2024-07-12T15:29:50Z")
The next round of Borrow Rate adjustments are shown below: | Asset | Market | Current Slope1 | Proposed Slope1 | | --- | --- | --- | --- | | DAI | Polygon v2 | 11.25% | 12.00% | | USDT | Polygon v2 | 11.25% | 12.00% | | wBTC | Polygon v2 | 6.25% | 7.00% | | wETH | Polygon v2 | 6.25% | 7.00% | | wUSDC | Polygon v2 | 11.25% | 12.00% | | wMATIC | Polygon v2 | 8.25% | 9.00% | ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [July 26, 2024, 12:06am UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/10 "2024-07-26T00:06:38Z")
The next round of updates (early August) will bring the following Borrow Rate adjustments: | Asset | Market | Current Slope1 | Proposed Slope1 | | --- | --- | --- | --- | | DAI | Polygon v2 | 12.00% | 12.75% | | USDT | Polygon v2 | 12.00% | 12.75% | | wBTC | Polygon v2 | 7.00% | 7.75% | | wETH | Polygon v2 | 7.00% | 7.75% | | wUSDC | Polygon v2 | 12.00% | 12.75% | | wMATIC | Polygon v2 | 9.00% | 9.75% | ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [August 21, 2024, 3:27pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/11 "2024-08-21T15:27:05Z")
The next round of updates (late August) will bring the following Borrow Rate adjustments: | Asset | Market | Current Slope1 | Proposed Slope1 | | --- | --- | --- | --- | | DAI | Polygon v2 | 12.75% | 13.50% | | USDT | Polygon v2 | 12.75% | 13.50% | | wBTC | Polygon v2 | 7.75% | 8.50% | | wETH | Polygon v2 | 7.75% | 8.50% | | wUSDC | Polygon v2 | 12.75% | 13.50% | | wMATIC | Polygon v2 | 9.75% | 10.5% | ---
**Author:** ![defijesus](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/defijesus/32/6056_2.png) [@defijesus](https://governance.aave.com/u/defijesus)\ **Post date:** [September 16, 2024, 3:44pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/12 "2024-09-16T15:44:27Z")
The next round of updates (late September) will bring the following Borrow Rate adjustments: | Asset | Market | Current Slope1 | Proposed Slope1 | | --- | --- | --- | --- | | DAI | Polygon v2 | 13.50% | 14.25% | | USDT | Polygon v2 | 13.50% | 14.25% | | wBTC | Polygon v2 | 8.50% | 9.25% | | wETH | Polygon v2 | 8.50% | 9.25% | | USDC | Polygon v2 | 13.50% | 14.25% | | wMATIC | Polygon v2 | 10.50% | 11.25% | ---
**Author:** ![clox](https://avatars.discourse-cdn.com/v4/letter/c/3be4f8/32.png) [@clox](https://governance.aave.com/u/clox)\ **Post date:** [October 8, 2024, 1:01pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/13 "2024-10-08T13:01:15Z")
The next round of updates (Mid October) will bring the following Borrow Rate adjustments: | Asset | Market | Current Slope1 | Proposed Slope1 | | --- | --- | --- | --- | | DAI | Polygon v2 | 14.25% | 15.00% | | USDT | Polygon v2 | 14.25% | 15.00% | | wBTC | Polygon v2 | 9.25% | 10.00% | | wETH | Polygon v2 | 9.25% | 10.00% | | USDC | Polygon v2 | 14.25% | 15.00% | | wMATIC | Polygon v2 | 11.25% | 12.00% | ---
**Author:** ![clox](https://avatars.discourse-cdn.com/v4/letter/c/3be4f8/32.png) [@clox](https://governance.aave.com/u/clox)\ **Post date:** [October 23, 2024, 8:33pm UTC](https://governance.aave.com/t/arfc-polygon-v2-borrow-rate-adjustments/17252/14 "2024-10-23T20:33:44Z")
The next round of updates (Late October) will bring the following Borrow Rate adjustments: | Asset | Market | Current Slope1 | Proposed Slope1 | | --- | --- | --- | --- | | DAI | Polygon v2 | 15.00% | 15.75% | | USDT | Polygon v2 | 15.00% | 15.75% | | wBTC | Polygon v2 | 10.00% | 10.75% | | wETH | Polygon v2 | 10.00% | 10.75% | | USDC | Polygon v2 | 15.00% | 15.75% | | wPOL | Polygon v2 | 12.00% | 12.75% |