Key Takeaways
CryptoSlate reports that Aave raised its GHO borrowing rate to 4.5% to close the yield gap, with the next test involving whether repayments rebuild USDC and USDT liquidity.
According to CryptoSlate, Aave's Ethereum Core market listed a 4.5% borrowing rate for GHO, aligning the borrowing cost with the savings rate reported by TokenLogic on Oct. 2. The rate change closed the previous yield gap where borrowers could pay 4.25% to acquire GHO on Core and earn 4.5% in sGHO.
TokenLogic previously reported a depleted USDC GHO Stability Module on Oct. 2 and stated that the rate increase should help replenish reserves if borrowers obtain repayment GHO through the modules by bringing USDC or USDT into them. Aavescan data from Oct. 5 displayed a 4.5% borrow APR, with snapshots locating the change between Oct. 3 and Oct. 4.
Whether the rate hike successfully improves conversion liquidity depends on the route borrowers use for repayments and new deposits, as secondary market purchases do not add stablecoins to the modules. Aave Labs and TokenLogic have advanced proposals concerning facilitators, cross-chain options via Plasma, and funding duration conditions to help address reserve pressures.
Source & Fact-Check Note
https://cryptoslate.com/aave-hikes-gho-borrow-rates-to-rescue-depleted-stablecoin-pools/
