Chaos Labs - Monthly Community Update

December 2023


This update highlights the past month’s activities and proposals.


  • Stablecoin IR Updates - we put forward a proposal to increase the stablecoin interest rate parameters across all Aave deployments. Despite recent adjustments under AIP-375, there’s continued volatility in borrow rates. An analysis of the Ethereum V3 platform shows a significant increase in both the supply and borrowing of stablecoins like USDC, USDT, and DAI, indicating that the market positively received these changes. However, the utilization rates post-AIP-375 show that the increase did not stabilize utilization as expected, highlighting the need for further adjustments. The proposal recommends increasing the Slope1 parameter to 6% for stablecoins across all Aave deployments to achieve a more stable and predictable borrowing rate, with a focus on maintaining equilibrium utilization under the UOptimal point.

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