Stablecoins
Following the latest Slope 1 increase, combined borrowing across Ethereum Core USDC and USDT has leveled off. This reflects a decline in USDT borrowing offsetting continued modest growth in USDC. We view this as a reason to pause further Slope 1 increases across the existing stablecoin program and begin reducing uOptimal on Ethereum Core USDT for now.
Overall, the program had a strongly positive effect on the market. Between August 28 and September 13, supply in Ethereum Core USDC and USDT increased by $355M, while combined borrows increased by $185M. The larger debt book and deeper liquidity leave both markets in a stronger position, with more capacity to absorb additional demand.
As previously stated, the uOptimal changes were targeted as a temporary measure during the USDe debt migration, and as that reaches its target, we aim to return the market to normal operating conditions. We will pause further Slope 1 increases before reducing uOptimal on Ethereum Core USDT from 94% to 93%. Growing supply means the temporary uOptimal support can begin to unwind while retaining room for further borrowing. Based on September 13 balances and unchanged supply, USDT could accommodate approximately $187M of additional debt before reaching 93% utilization. The lower uOptimal would modestly increase USDT borrower rates. We will assess supply, borrowing, and utilization after this step before recommending further parameter changes.
We propose the following adjustment:
| Chain | Market | Reserve | Parameter | Current | Recommended |
|---|---|---|---|---|---|
| Ethereum | Core | USDT | uOptimal | 94.00% | 93.00% |
USDe
The USDe base-rate adjustments are now complete at 6.3% across Ethereum Core, Avalanche, Mantle, Monad, and Plasma. We propose no further base-rate change at this stage. Ethereum Core and Avalanche have also reached the 0.25% Slope 1 target. The remaining adjustment is a Slope 1 reduction on Mantle, Monad, and Plasma, bringing each reserve to the same target and completing the current alignment sequence.
| Chain | Market | Reserve | Parameter | Current | Recommended |
|---|---|---|---|---|---|
| Mantle | - | USDe | Slope 1 | 1.00% | 0.25% |
| Monad | - | USDe | Slope 1 | 1.00% | 0.25% |
| Plasma | - | USDe | Slope 1 | 1.00% | 0.25% |
We will continue to reassess the USDe rate target against the staking rate and publish the updated target weekly, together with any corresponding adjustment.
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