Crazy old loan APY on V2 that *4 the debt. Need help with situation

I supply dai on v2 ethereum, an old supplier. I also have a debt in tusd on the same version. Recently, i connected and noticed that the debt more than doubled with an on going apy of over 4000%. The sum is quite big. What should i do in this situation? Wait until the apy changes? Will it lower the sum i owe? Is that an attack on older supply? Via crazy lending on low volume pools?

1 Like

TUSD is planned to be off-boarded so suppliers are removing liquidity, thereby raising rates. You should probably get out of that position.

As for the loan payback rate, every block the new debt is calculated with that block’s interest rate (some fraction of the APR) so you should move out as soon as possible.

Thanks. Thing is we are talking almost 5 figure debt from 15k debt. Its kinda a lot

Unfortunately, that debt is NOT going down. This is a natural protocol event.

I understand. But doesn’t the debt amount lowers if the apy lowers? Check out this chart (borrow info):

It seems the rate jumps from 3 to 4000% per every few days. This seems fishy. Also, the money is kinda ll i got, so suddenly understanding i owe 90k and not 15k, is a bit of a shock

PS. Also found this. Aave - Freeze TUSD Reserve on Aave V2 Ethereum

Meaning how can apy increase if there is no new deposits or withdraws?

The amount owed does not lower. It is the addition of all the calculations done since the creation.

The DAO decided to set the borrow APY significantly higher than the supply in an effort to encourage people to get off the asset. If you look at the interest rate model all the way at the bottom, it practically spikes to the hundreds after 1% utilization. Due to the low liquidity, even the smallest withdrawal could peak it. The 4k is for sure confusing as it indicates an above 100% utilization… Perhaps there are some weird contract code quirks similar to Ampleforth’s AMPL.

I got to go, hopefully you can get some closure on this.


thanks. but Aave - Freeze TUSD Reserve on Aave V2 Ethereum this doesn’t make sense. how can apy be so high if its frozen?

also the daily jumps from 1 to 4000 dont make sense

Yeah, I have no clue as to why the APY is fluctuating that badly despite being frozen. That part is NOT natural as far as I know.

1 Like

thanks again. any further help from anyone else is appreciated

1 Like

Everything was communicated and there is also an info button when checking TUSD on V2 which refers to this thread: [ARFC] TUSD Offboarding Plan - Governance - Aave

Im closing this thread now, and i highly recommend migrating your position to V3 or repaying your debt.