The model raises rates more sharply above the optimal point, making further borrowing more expensive as available withdrawal liquidity shrinks. The base rate and both slope parameters are unchanged: borrowing APR remains 4.5% at the optimal point and 14.5% at full utilization.
Liquidity Below the New Threshold
On Oct. 26, Aave’s $USDT reserve dashboard showed 89.26% utilization, about 2.79 billion $USDT supplied and $298.81 million in available liquidity. It quoted a 4.46% variable borrowing APY and a 3.57% supply APY.
The pool therefore remained below the new threshold. Suppliers’ immediate withdrawal capacity depends on available liquidity, rather than the full amount supplied to the market.
Liquidity was tighter earlier this month. The Defiant reported on Oct. 8 that the reserve had 93.74% utilization and $169.54 million available, following a wallet’s transfer of 150 million $USDT from Aave into Spark Savings.
The Oct. 21 Ethereum transaction also reduced supply caps for USDe from 400 million to 300 million tokens, LINK from 11.4 million to 9 million, and rETH from 49,000 to 40,000.