Summary
LlamaRisk recommends the following parameter changes based on user behavior, on-chain liquidity, and position health observed in the latest review of Aave V3 reserves.
- Increase the stablecoin Slope1 by 10 bps, excluding USDe.
- Increase the USDe base rate by 1% to 6% and decrease Slope1 by 1% on Core, Plasma, Monad, Mantle, and Avalanche.
- Decrease USDT0 Slope2 from 40% to 20% and increase supply cap for PT-USDG-29OCT2026 from 70M to 140M on X Layer.
PT-USDG-29OCT2026 (Aave V3 X Layer)
PT-USDG-29OCT2026 has reached 93.4% supply cap utilization on the Aave V3 X Layer instance.
Supply Distribution
Source: LlamaRisk, September 9, 2026
The top suppliers have a median health factor of 1.03. Borrowing is overwhelmingly denominated in USD₮0, with 55.1M of debt accounting for 98.7% of the total, followed by USDG. This debt is backed by PT collateral held within the isolated PT E-Mode categories, meaning the cohort is effectively holding stablecoin debt against a stablecoin-denominated PT. As a result, the health factor is driven primarily by the PT’s discount to par rather than by directional price movements.
Liquidity
Source: LlamaRisk, September 9, 2026
The primary trading venue is the Pendle AMM pool on X Layer, which holds 4.73M in total liquidity, split 88% SY and 12% PT. The SY side is the leg a liquidator draws from when selling PT, and it holds 4.17M against the 65.4M supplied to the reserve. Pool TVL has grown from close to zero in mid August and peaked near 8.1M at the start of September. The PT matures on October 29, 2026, after which it becomes redeemable at par against USDG, so the exit at maturity does not depend on secondary market depth.
Recommendation
The PT matures on October 29, 2026, after which it becomes redeemable at par against USDG. We recommend increasing the supply cap from 70M to 140M, which places the reserve at approximately 46.7% post-change cap utilization.
Stablecoin Slope1 Increases
The recommendation raises Slope1 by 10 BPS on sixteen stablecoin reserves across eleven deployments, continuing the Slope1 program in the stablecoin interest rate changes proposed by TokenLogic. The base rate, the optimal utilization point, and Slope2 are unchanged on every reserve.
| Instance | Asset | Utilization | uOptimal | Current Borrow APR | New Borrow APR | Delta |
|---|---|---|---|---|---|---|
| Aave V3 Core | USDC | 94.0% | 94.0% | 4.30% | 4.40% | +10 BPS |
| Aave V3 Core | USDT | 93.5% | 94.0% | 4.28% | 4.38% | +10 BPS |
| Aave V3 Plasma | USDT0 | 94.0% | 94.0% | 4.30% | 4.40% | +10 BPS |
| Aave V3 Base | USDC | 88.9% | 90.0% | 4.54% | 4.64% | +10 BPS |
| Aave V3 Arbitrum | USD₮0 | 89.8% | 90.0% | 4.29% | 4.39% | +10 BPS |
| Aave V3 Avalanche | USDC | 90.5% | 90.0% | 4.80% | 4.90% | +10 BPS |
| Aave V3 Avalanche | USDt | 91.7% | 90.0% | 5.99% | 6.09% | +10 BPS |
| Aave V3 Monad | USDC | 92.4% | 92.0% | 5.36% | 5.46% | +10 BPS |
| Aave V3 Monad | USDT0 | 92.0% | 92.0% | 4.35% | 4.45% | +10 BPS |
| Aave V3 MegaETH | USDm | 89.8% | 90.0% | 4.29% | 4.39% | +10 BPS |
| Aave V3 BNB Chain | USDC | 85.4% | 90.0% | 4.08% | 4.18% | +9 BPS |
| Aave V3 BNB Chain | USDT | 82.4% | 90.0% | 3.93% | 4.03% | +9 BPS |
| Aave V3 Gnosis | USDC.e | 77.4% | 90.0% | 3.70% | 3.78% | +9 BPS |
| Aave V3 Optimism | USDT | 80.5% | 90.0% | 3.85% | 3.94% | +9 BPS |
| Aave V3 Linea | USDC | 87.4% | 90.0% | 4.18% | 4.27% | +10 BPS |
| Aave V3 Linea | USDT | 87.8% | 90.0% | 4.19% | 4.29% | +10 BPS |
These reserves carry approximately 6.18B in aggregate debt, and most run close to their optimal utilization, as shown in the table. Because Slope2 and the optimal utilization point are unchanged, the rate response above the optimal point shifts up by the same 10 BPS, and the incentive to repay or supply during a liquidity squeeze is preserved.
USDe Interest Rate Model
The recommendation raises the USDe base rate by 100 BPS to 6.00% on all five deployments that carry USDe, continuing the realignment set out in the stablecoin interest rate changes proposed by TokenLogic, which prices USDe borrowing in line with Ethena’s native staking rate. Slope1 comes down 100 BPS on all five, continuing the blend toward the 0.25% Slope1 in the same proposal.
| Instance | Utilization | uOptimal | Current Borrow APR | New Borrow APR | Delta |
|---|---|---|---|---|---|
| Aave V3 Core | 32.3% | 90.0% | 5.72% | 6.36% | +64 BPS |
| Aave V3 Plasma | 22.4% | 85.0% | 5.79% | 6.53% | +74 BPS |
| Aave V3 Monad | 17.2% | 90.0% | 5.57% | 6.38% | +81 BPS |
| Aave V3 Mantle | 9.0% | 85.0% | 5.32% | 6.21% | +89 BPS |
| Aave V3 Avalanche | 69.9% | 80.0% | 6.75% | 6.87% | +13 BPS |
These five reserves carry approximately 323.8M in aggregate USDe debt against approximately 1.18B supplied. Because the optimal utilization point is unchanged on all five reserves, the share of supply held as withdrawal liquidity at that point is unchanged.
X Layer Slope2 Reduction
USD₮0 on Aave V3 X Layer sits at 89.5% utilization against a 90.0% optimal utilization point, with 60.6M borrowed against 67.8M supplied and 7.1M in idle liquidity, or 10.5% of supply. The recommendation reduces Slope2 from 40% to 20%, leaving the base rate, the optimal utilization point, and Slope1 unchanged.
Because the reserve is below optimal utilization, the borrow APR remains unchanged. The change takes effect only above the optimal utilization point, where it halves the penalty applied to excess utilization.
| Utilization | Current Borrow APR | New Borrow APR |
|---|---|---|
| 89.5% (current) | 4.47% | 4.47% |
| 90.0% (uOptimal) | 4.50% | 4.50% |
| 100.0% | 44.50% | 24.50% |
Specification
Caps
| Instance | Asset | Current Supply Cap | Recommended Supply Cap |
|---|---|---|---|
| Aave V3 X Layer | PT-USDG-29OCT2026 | 70,000,000 | 140,000,000 |
USDe
| Instance | Asset | Current Base Variable Rate | Recommended Base Variable Rate | Current Slope 1 | Recommended Slope 1 |
|---|---|---|---|---|---|
| Aave V3 Core | USDe | 5.00% | 6.00% | 2.00% | 1.00% |
| Aave V3 Plasma | USDe | 5.00% | 6.00% | 3.00% | 2.00% |
| Aave V3 Monad | USDe | 5.00% | 6.00% | 3.00% | 2.00% |
| Aave V3 Mantle | USDe | 5.00% | 6.00% | 3.00% | 2.00% |
| Aave V3 Avalanche | USDe | 5.00% | 6.00% | 2.00% | 1.00% |
Slope 1
| Instance | Asset | Current Slope 1 | Recommended Slope 1 |
|---|---|---|---|
| Aave V3 Core | USDC | 4.30% | 4.40% |
| Aave V3 Core | USDT | 4.30% | 4.40% |
| Aave V3 Plasma | USDT0 | 4.30% | 4.40% |
| Aave V3 Base | USDC | 4.60% | 4.70% |
| Aave V3 Arbitrum | USD₮0 | 4.30% | 4.40% |
| Aave V3 Avalanche | USDC | 4.30% | 4.40% |
| Aave V3 Avalanche | USDt | 4.30% | 4.40% |
| Aave V3 Monad | USDC | 4.30% | 4.40% |
| Aave V3 Monad | USDT0 | 4.30% | 4.40% |
| Aave V3 MegaETH | USDm | 4.30% | 4.40% |
| Aave V3 BNB Chain | USDC | 4.30% | 4.40% |
| Aave V3 BNB Chain | USDT | 4.30% | 4.40% |
| Aave V3 Gnosis | USDC.e | 4.30% | 4.40% |
| Aave V3 Optimism | USDT | 4.30% | 4.40% |
| Aave V3 Linea | USDC | 4.30% | 4.40% |
| Aave V3 Linea | USDT | 4.30% | 4.40% |
Slope 2
| Instance | Asset | Current Slope 2 | Recommended Slope 2 |
|---|---|---|---|
| Aave V3 X Layer | USD₮0 | 40.00% | 20.00% |
Next Steps
We will move forward and implement these updates via the Risk Steward process. The implemented changes can be reviewed on the LlamaRisk Risk Stewards Dashboard.
Disclosure
This review was independently prepared by LlamaRisk, a DeFi risk service provider funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.