Aave's USDT borrow rate heads to 4.19 percent: what it means for lenders

The information provided in this article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry a high degree of risk. Always conduct your own research.Aave's Risk Stewards want to cut the optimal usage ratio for USDT from 94 to 92 percent. Borrowers pay slightly more, while the withdrawal buffer for depositors grows by 57.8 million USDT.Lenders and borrowers in Aave's USDT market will soon see a different rate. On October 20 the protocol's Risk Stewards recommended cutting the optimal usage ratio for USDT on Aave V3 Core from 94.00 to 92.00 percent. At the current level of usage that would lift the variable borrow rate from 4.10 to 4.19 percent a year and the supply rate from 3.16 to 3.22 percent. Several other caps are coming down at the same time. AAVE itself trades 13.8 percent below its weekly high. What Aave is changing in the USDT market Aave is a decentralised lending market: users deposit funds, others borrow against collateral, and the rate comes out of a formula rather than a negotiation. Those formulas are maintained by Risk Stewards, who can move parameters within fixed bounds without a full governance vote each ti...