DeFi Lenders Make Stablecoin Leverage Costlier
As stablecoin liquidity tightens, DeFi money markets will keep lowering utilization thresholds and steepening rate curves to protect withdrawals. That raises the carry cost of leveraged stablecoin loops, such as those built on Ethena's USDe, and forces recurring deleveraging of yield strategies built on cheap borrowing.
forming · confidence 35 · Emerging (watchlist) · tracking since October 24, 2026 · updated October 24, 2026
Why the conviction moved
- Oct 24Strengthened
Aave lowered its USDT utilization threshold to 92%. At 94% utilization the new curve charges about 7% a year instead of 4.5%, which directly pressures leveraged loops built on Ethena's USDe.
Source trail
Supporting · October 24, 2026
Aave Lowers Its USDT Utilization Threshold to 92%, Raising Borrowing Costs Earlier to Protect Withdrawals
Aave lowered its USDT utilization threshold to 92%. At 94% utilization the new curve charges about 7% a year instead of 4.5%, which directly pressures leveraged loops built on Ethena's USDe.
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