Summary
Following the freeze of Aave V3 and Aave V4 reserves in response to the Binance hot wallet incident on October 29, 2026, LlamaRisk recommends temporarily reducing Slope2 for stablecoin reserves, and for WETH on the Aave V4 Ethereum Core Hub, so that the variable borrow rate at full utilization does not exceed 10.00% APR. The base rate, Slope1 and optimal utilization point are unchanged, so borrow rates at or below the optimal point are unaffected. The changes apply to reserves with more than $10M supplied, utilization above or within 5 percentage points of the optimal point, and a borrow rate at full utilization above 10.00% APR, together with GHO on Aave V3 Monad.
Aave V3 Core:
- Decrease Slope2 for USDC from 10.00% to 5.50%.
- Decrease Slope2 for USDT from 10.00% to 5.50%.
- Decrease Slope2 for DAI from 35.00% to 15.00%.
- Decrease Slope2 for USDtb from 50.00% to 30.00%.
Aave V3 Plasma:
- Decrease Slope2 for USDT0 from 10.00% to 5.50%.
- Decrease Slope2 for GHO from 16.50% to 5.25%.
Aave V3 Base:
- Decrease Slope2 for USDC from 10.00% to 5.25%.
Aave V3 Mantle:
- Decrease Slope2 for USDT0 from 10.00% to 6.00%.
Aave V3 Monad:
- Decrease Slope2 for USDC from 20.00% to 5.00%.
- Decrease Slope2 for USDT0 from 20.00% to 5.00%.
- Decrease Slope2 for mUSD from 40.00% to 20.00%.
- Decrease Slope2 for GHO from 20.00% to 5.00%.
Aave V3 Avalanche:
- Decrease Slope2 for USDC from 10.00% to 5.50%.
- Decrease Slope2 for USDt from 10.00% to 5.50%.
Aave V3 Optimism:
- Decrease Slope2 for USDC from 10.00% to 6.00%.
Aave V3 Horizon:
- Decrease Slope2 for RLUSD from 25.00% to 5.00%.
Aave V4 Ethereum:
- Decrease slope2 for USDT on the Core Hub from 20.00% to 5.50%.
- Decrease slope2 for USDG on the Core Hub from 20.00% to 6.00%.
- Decrease slope2 for USDC on the Core Hub from 20.00% to 4.50%.
- Decrease slope2 for frxUSD on the Core Hub from 35.00% to 15.00%.
- Decrease slope2 for WETH on the Core Hub from 8.00% to 7.80%.
- Decrease slope2 for USDG on the Paxos Hub from 20.00% to 6.00%.
Aave V4 Arc:
- Decrease slope2 for USDC on the Core Hub from 10.00% to 5.90%.
Rationale
Frozen reserves accept no new supply or borrowing, while withdrawals, repayments and liquidations continue to function. Since the freeze, supplier withdrawals have pushed the largest stablecoin reserves across Aave V3 and Aave V4 to between 92% and 100% utilization, where current Slope2 settings put variable borrow rates between 10% and 36% APR, and up to 55% APR at full utilization on some reserves. With new supply blocked, a rate above the optimal point no longer attracts deposits, and borrowers cannot add collateral to frozen reserves, so the elevated rate mostly accrues to borrower debt and erodes health factors while the freeze lasts.
The rate at full utilization equals the sum of the base rate, Slope1 and Slope2, so each reserve’s target Slope2 is 10.00% minus its base rate and Slope1. The changes are a temporary measure for the freeze period, and we will review the previous Slope2 settings as reserves are unfrozen.
Aave V3 Horizon was not frozen, but supplier withdrawals have pushed RLUSD to 94.1% utilization, where the borrow rate stands at 15.2% APR and reaches 30.0% APR at full utilization. We apply the same 10.00% cap to RLUSD on Horizon for consistency across Aave during the incident. Horizon has no Risk Steward, so the Horizon Operations multisig will execute these changes through the PoolConfigurator in a single update.
Aave V3
| Instance | Asset | Supplied | Utilization | uOptimal | Current Borrow APR | New Borrow APR | Current APR at 100% | New APR at 100% |
|---|---|---|---|---|---|---|---|---|
| Aave V3 Core | USDC | $2,140M | 97.8% | 94% | 10.8% | 8.0% | 14.5% | 10.0% |
| Aave V3 Core | USDT | $2,717M | 91.7% | 92% | 4.5% | 4.5% | 14.5% | 10.0% |
| Aave V3 Core | DAI | $126M | 91.8% | 92% | 5.0% | 5.0% | 40.0% | 20.0% |
| Aave V3 Core | USDtb | $11.3M | 78.4% | 80% | 3.9% | 3.9% | 54.0% | 34.0% |
| Aave V3 Plasma | USDT0 | $706M | 100.0% | 94% | 14.5% | 10.0% | 14.5% | 10.0% |
| Aave V3 Plasma | GHO | $14.5M | 99.6% | 92% | 20.5% | 9.8% | 21.25% | 10.0% |
| Aave V3 Base | USDC | $182M | 95.3% | 90% | 10.1% | 7.5% | 14.75% | 10.0% |
| Aave V3 Mantle | USDT0 | $149M | 99.6% | 90% | 13.6% | 9.8% | 14.0% | 10.0% |
| Aave V3 Monad | USDC | $143M | 98.1% | 92% | 20.2% | 8.8% | 25.0% | 10.0% |
| Aave V3 Monad | USDT0 | $55M | 100.0% | 92% | 25.0% | 10.0% | 25.0% | 10.0% |
| Aave V3 Monad | mUSD | $31M | 95.5% | 80% | 36.1% | 20.5% | 45.0% | 25.0% |
| Aave V3 Monad | GHO | $9.4M | 100.0% | 92% | 25.0% | 10.0% | 25.0% | 10.0% |
| Aave V3 Avalanche | USDC | $64M | 98.3% | 90% | 12.8% | 9.1% | 14.5% | 10.0% |
| Aave V3 Avalanche | USDt | $25M | 90.6% | 90% | 5.8% | 4.8% | 14.5% | 10.0% |
| Aave V3 Optimism | USDC | $10M | 94.9% | 90% | 8.9% | 6.9% | 14.0% | 10.0% |
| Aave V3 Horizon | RLUSD | $86M | 94.1% | 90% | 15.2% | 7.1% | 30.0% | 10.0% |
Source: LlamaRisk, October 30, 2026, 00:26 UTC
Aave V4
Aave V4 sets the interest rate model per hub asset, so each change applies to every spoke drawing from that hub. The USDC slope2 on the Ethereum Core Hub accounts for the queued slope1 increase from 5.00% to 5.50% recommended on October 29, 2026, so the rate at full utilization lands at 10.00% once both changes execute.
| Hub | Asset | Added | Utilization | Optimal Usage Ratio | Current Drawn APR | New Drawn APR | Current APR at 100% | New APR at 100% |
|---|---|---|---|---|---|---|---|---|
| Arc Core | USDC | $109M | 100.0% | 90% | 14.1% | 10.0% | 14.1% | 10.0% |
| Ethereum Core | USDT | $25M | 95.7% | 92% | 13.9% | 7.1% | 24.5% | 10.0% |
| Ethereum Core | USDG | $79M | 92.1% | 90% | 8.2% | 5.3% | 24.0% | 10.0% |
| Ethereum Core | USDC | $58M | 87.6% | 92% | 4.8% | 4.8% | 25.0% | 10.0% |
| Ethereum Core | frxUSD | $25M | 86.9% | 90% | 3.9% | 3.9% | 39.0% | 19.0% |
| Ethereum Core | WETH | $97M | 96.7% | 92% | 6.9% | 6.8% | 10.2% | 10.0% |
| Ethereum Paxos | USDG | $54M | 89.6% | 90% | 4.0% | 4.0% | 24.0% | 10.0% |
Source: LlamaRisk, October 30, 2026, 00:26 UTC
Specification
Aave V3 Slope 2
| Instance | Asset | Current Slope 2 | Recommended Slope 2 |
|---|---|---|---|
| Aave V3 Core | USDC | 10.00% | 5.50% |
| Aave V3 Core | USDT | 10.00% | 5.50% |
| Aave V3 Core | DAI | 35.00% | 15.00% |
| Aave V3 Core | USDtb | 50.00% | 30.00% |
| Aave V3 Plasma | USDT0 | 10.00% | 5.50% |
| Aave V3 Plasma | GHO | 16.50% | 11.50% |
| Aave V3 Base | USDC | 10.00% | 5.25% |
| Aave V3 Mantle | USDT0 | 10.00% | 6.00% |
| Aave V3 Monad | USDC | 20.00% | 5.00% |
| Aave V3 Monad | USDT0 | 20.00% | 5.00% |
| Aave V3 Monad | mUSD | 40.00% | 20.00% |
| Aave V3 Monad | GHO | 20.00% | 5.00% |
| Aave V3 Avalanche | USDC | 10.00% | 5.50% |
| Aave V3 Avalanche | USDt | 10.00% | 5.50% |
| Aave V3 Optimism | USDC | 10.00% | 6.00% |
| Aave V3 Horizon | RLUSD | 25.00% | 5.00% |
Aave V4 IRM
| Hub | Asset | Parameter | Current | Recommended |
|---|---|---|---|---|
| Arc Core | USDC | Slope 2 | 10.00% | 5.90% |
| Ethereum Core | USDT | Slope 2 | 20.00% | 5.50% |
| Ethereum Core | USDG | Slope 2 | 20.00% | 6.00% |
| Ethereum Core | USDC | Slope 2 | 20.00% | 4.50% |
| Ethereum Core | frxUSD | Slope 2 | 35.00% | 15.00% |
| Ethereum Core | WETH | Slope 2 | 8.00% | 7.80% |
| Ethereum Paxos | USDG | Slope 2 | 20.00% | 6.00% |
Next Steps
We will move forward and implement these updates via the Risk Steward process, with the GHO changes on Aave V3 Plasma and Aave V3 Monad executed through the GHO Stewards and the Aave V3 Horizon changes executed by the Horizon Operations multisig. The implemented changes can be reviewed on the LlamaRisk Risk Stewards Dashboard for Aave V3 and the Aave V4 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.