Aave’s Ethereum Borrowing Curve Raises Costs Sooner as Liquidity Tightens

Aave’s Ethereum market for Tether USDt (USDT) now applies higher borrowing costs earlier when borrowers use more available liquidity. Aave’s variable borrowing rates adjust with utilization. As utilization rises, the rate curve reaches higher borrowing costs sooner. The adjustment changes how quickly an outstanding USDT loan grows as liquidity conditions shift. Interest accrued before a rate change remains in the loan balance. An existing borrower’s balance therefore includes interest accumulated under earlier rates, while subsequent growth reflects the rate that applies as utilization changes. Simon Yoon reports on blockchain technology for TokenPost. Send corrections or tips to info@tokenpost.com.

Source: TokenPost