# Aave borrowing-rate restoration proposal

> LlamaRisk proposed raising Ethereum Core USDC Slope2 from 5.50% to 10.00%. Borrowers above optimal utilization would pay higher rates.

- URL: https://riadefi.com/on-chain/2026-10-31-aave-slope2-restoration/
- Type: Economic change
- Stage: Proposed
- Evidence: confirmed
- Materiality: material
- Event date: 2026-10-31
- Version: 1, published 2026-11-01 (first published 2026-11-01)
- Follow-up: 2026-11-02
- Advisor-relevant: no
- Affects: Aave v3 (protocol); Aave v4 (protocol)

## What happened

LlamaRisk proposed restoring Aave borrowing-rate slopes on October 31 after temporary reductions following the Binance incident.

## What changed

LlamaRisk proposed raising Ethereum Core USDC Slope2 from 5.50% to 10.00%. Borrowers above optimal utilization would pay higher rates.

## What did not change

LlamaRisk proposed keeping base rates, Slope1 and optimal utilization unchanged.

## Confirmed

- LlamaRisk reported that the affected reserves again accepted deposits and borrowing on October 31.
- LlamaRisk proposed implementing the changes through Risk Stewards, with the Horizon Operations multisig handling Horizon.

## Still open

- The proposal does not establish execution of the rate changes.
- LlamaRisk did not demonstrate withdrawals at the sizes clients might require.

## What it means for an advisor

- Ketju should review borrowing-cost assumptions and available withdrawal liquidity in the Aave memos before treating the proposed rates as operative.

## Sources

1. [Aave borrowing-rate restoration proposal](https://governance.aave.com/t/risk-stewards-slope2-increases-on-aave-v3-and-aave-v4-2026-10-31/25970) · LlamaRisk · 2026-10-31


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Published by Ketju Research on RIADeFi (https://riadefi.com). Educational research for financial professionals; not investment, legal, tax, or compliance advice.