Aave changes USDT borrowing rules and loan costs suddenly jump
Summary
Aave lowered the optimal utilization threshold for USDT borrowing on its Ethereum Core market from 94% to 92%, effective Oct. 21. Above the new threshold, borrowing rates rise more steeply to encourage repayments or additional deposits and preserve withdrawal headroom. At 94% utilization, the revised curve implies a 7% APR versus 4.5% under the prior curve; the observed borrowing APR on Oct. 23 was 4.23%. Based on LlamaRisk’s reported supply, the change represents about 57.8 million USDT more modeled idle liquidity at the threshold, not cash guaranteed to be available. Actual withdrawals depend on pool cash and borrower repayments or supplier deposits.
