Morning Edition · Saturday, October 24, 2026Published at 1:47 AM EDT · New York

Aave Lowers Its USDT Utilization Threshold to 92%, Raising Borrowing Costs Earlier to Protect Withdrawals

At 94% utilization the new curve charges about 7% a year instead of 4.5%, a change that pressures leveraged stablecoin loops such as those built on Ethena's USDe.

Aave, the largest lending protocol on Ethereum, implemented a lower USDT rate threshold on Oct. 21. The utilization level at which borrowing costs rise steeply fell from 94% to 92% of the pool. Utilization is the share of deposited liquidit…