[ARFC] TokenLogic GHO Stewards - GHO Borrow Rate Update 02/03


title: [ARFC] TokenLogic GHO Stewards - GHO Borrow Rate Update 02/03
author: @TokenLogic
created: 2025-02-03


Summary

This publication proposes reducing the GHO Borrow Rate by 1.00% on Core and is to be implemented by the GHO Stewards.

Motivation

Despite the weekend’s volatility and liquidations, the market showed strong resilience. Aave performed flawlessly, with no bad debt incurred, demonstrating the protocol’s robustness. While some users proactively repaid their debts to avoid liquidation, this resulted in a significant reduction of GHO supply, with over 10M GHO burned in the past 48 hours.

This proposal recommends lowering the GHO borrow rate to 8.00%, positioning it as the most affordable stablecoin debt on the Core Market. This adjustment aims to encourage users to shift their existing USDT and USDC debt into GHO.

Additionally, we’ve observed several strong indicators of GHO’s resilience. Throughout the weekend’s volatility, the peg remained stable, showing no signs of stress despite significant trading volume across all GHO pools. Moreover, liquidity distribution within the Maverick pools has improved, while other pools have maintained consistent performance.

The USDC GSM has experienced its largest inflow since August 5th 2024, now holding 3.5M. When combined with the Maverick pools, total stablecoin liquidity supporting GHO through USDC and USDT buy walls exceeds 18.75M.
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Recommendation

GHO has shown strong resilience amid recent market volatility, with no bad debt on Aave, a stable peg, and liquidity remaining robust, with improved distribution in Maverick pools and the USDC GSM seeing its largest inflow since August.

Given this stability and GHO’s strength, we recommend reducing the GHO borrow rate from 9% to 8% to make it the most competitive stablecoin debt on the Core Market and attract users to shift from USDT and USDC.

This proposal is supported by the GHO Stewards.

Specification

The GHO borrow rate is to be revised as follows:

Description Current Proposed Change
Borrow Rate 9.00% 8.00% -1.00%

This proposal is to be implemented by the GHO Stewards.

Disclosure

TokenLogic does not receive any payment for this proposal.

Next Steps

The GHO Stewards will implement this proposal.

Copyright

Copyright and related rights waived via CC0.

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