The first round of adjustments was executed on August 27 through the Risk Steward process, as covered by LlamaRisk in Risk Stewards: Stablecoin IRM Changes on Aave V3 / 2026.08.27.
With the market accelerating and utilization growing across the reserves in scope, the Slope1 increases will proceed at a faster cadence, in line with the staged implementation outlined above. Accordingly, this round moves Slope1 by 20 bps, doubling the step size of the first round. The specifications below cover the second round of adjustments.
USDe adjustment concerns
Several comments above focus on the USDe realignment, so we address the main points here. The repricing deliberately trades subsidized borrow volume for market health. We expect additional stablecoin demand through migration, along with a healthier USDe market more prone to growth, to offset the revenue that the repriced borrows no longer generate.
On the 5.3% reference rate: Ethena’s rewards are not confined to staked USDe. Almost all USDe is held through a qualifying channel that earns rewards, roughly $4.1B, of which $1.3B is staked in sUSDe, $1.2B is supplied on Aave, and most of the remainder sits on partner venues running Ethena funded earn programs, from exchange hold-to-earn products to retail platforms. Only the residual balance earns no rewards. Ethena funds these rewards with yield from its backing portfolio, currently around 5%. Borrowing breaks the one-to-one link between rewarded balances and backing. When borrowed USDe is staked, the same backing funds rewards twice, once on the supplier side and once on the staked tokens; when it is sold, it ends up redeemed, and rewards keep accruing on deposits whose backing has left. Either way, Ethena currently pays rewards on the full $0.64B of borrowed USDe, even though these balances exceed the supply that actually exists. The only offset is the share of borrow interest that suppliers receive. At the pre-change borrow rates and the current 4.8% staking rate, that loss runs at about $19M per year. For each reserve, the calculation is:
The repricing recovers that $19M and redistributes it across the $3.9B of supply that keeps earning, adding roughly 50 bps and taking the expected staking rate from 4.8% today to 5.3%.
This is also why a USDe borrow rate below the staking rate represents a net loss for Ethena stakers. Every unit borrowed below that rate captures a spread funded by the rewards that would otherwise reach existing holders. The lower the borrow rate, the larger that transfer, and the more the market’s growth depends on it persisting. Pricing the borrow cost in line with the staking rate removes the subsidy and leaves both the reserve and the underlying product healthier.
For existing borrowers, a debt swap is the efficient way to adjust without closing the position. Migrating debt from USDe into USDC or USDT keeps the collateral in place and moves only the liability. The same option is available on Plasma, where positions collateralized by PT-sUSDe cannot exit by selling the collateral before maturity. A debt migration from USDe to USDT0 leaves the collateral untouched, while Plasma USDT0 is part of both the Slope 1 set and the temporary uOptimal increase, which attracts new supply and frees capacity for migrated debt. The base adjustment itself proceeds in 100 bps steps, leaving time to execute the migration. Across the program, the temporary uOptimal increase frees roughly $116M of additional borrowing capacity on the reserves expected to receive the migrated debt.
Slope 1
USDe Alignment
The Aave v4 reserves in scope will follow once the Risk Stewards are deployed on v4.
Specifications for the following rounds will be posted as the sequence progresses.
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