Aave's Risk Stewards, acting on LlamaRisk analysis, have approved a series of parameter changes across Aave V3 deployments on Monad, Plasma, and Core. Key changes include raising the baseVariableBorrowRate for USDe from 1.00% to 2.00% across all three markets and expanding USDe supply caps substantially, from 120M to 220M on Monad and 375M to 450M on Plasma. USDC and USDT optimal usage ratios were also increased, signaling tighter liquidity management expectations.
For Armada's crypto desk, the USDe borrow rate doubling is the most actionable signal. Aave V3 rates serve as a real-time benchmark for institutional crypto lending and repo pricing. A 100bps increase in the USDe base rate implies upward pressure on comparable crypto-collateralized repo rates. Armada should confirm that its own repo pricing for stablecoin-denominated transactions remains competitive and appropriately risk-adjusted relative to the updated Aave IRM parameters.