Aave's Risk Stewards have proposed reducing the WETH Slope1 borrow rate on Aave V3 Base from 2.50% to 2.30% and raising the optimal utilization threshold from 90% to 92%. The motivation is normalizing Base with other Aave deployments after August rate cuts, following a utilization decline from a peak of 76K WETH borrowed to approximately 69K WETH against 85K WETH in supply.
For Armada's crypto repo desk, the Aave WETH rate curve on Base is a direct benchmark for ETH-collateralized repo pricing. A reduction in Slope1 lowers the DeFi borrow rate floor, narrowing the spread available to Armada on ETH repo transactions if market participants can source cheaper ETH funding on-chain. Armada should monitor governance passage and reprice ETH repo terms against the new curve if the proposal is adopted.