Aave's Risk Stewards published a September 11 proposal to increase Slope1, the interest rate model parameter governing rates below optimal utilization, to 5.00% for all stablecoin reserves on the Aave V3 Monad deployment. The adjustment is driven by persistent above-optimal utilization: both USDC and USDT0 reserves spent roughly a third of the past month above their utilization targets, and USDT0 supply collapsed from $167 million to $57 million since mid-August as large suppliers exited during rate spikes driven by leveraged syrupUSDC, USDe, and PT-AUSD strategies.
For Armada's crypto repo desk, a 5.00% Slope1 floor on Monad stablecoins establishes a higher DeFi benchmark rate for USDC and USDT capital. Counterparties such as market makers and family offices holding stablecoins will increasingly reference Aave DeFi rates when evaluating Armada repo terms. If the proposal passes governance, Armada's stablecoin-denominated crypto repo pricing should be reviewed for competitiveness against this updated benchmark.