Circle has initiated a proposal on the Aave forum to raise the maximum deposit interest rate for USDC to 48.2%.

Mars Finance reports that Circle Chief Economist Gordon Liao proposed a motion at the Aave Governance Forum, suggesting an urgent adjustment to the USDC interest rate parameters in the Aave V3 Ethereum main pool to address the situation where the pool’s utilization rate has remained at a very high level of 99.87% for four consecutive days following the KelpDAO attack. Liao stated that Aave’s current interest rate mechanism has failed to effectively “clear” the market. The funding pool currently has a supply size of $1.89 billion, with the same amount borrowed, and available liquidity is less than $3 million. Borrowing rates remain at the upper limit (about 14%) after the inflection point, and over the past 24 hours, the pool size has shrunk by approximately $60 million—due to repayment funds being used one by one to meet queued withdrawal requests. Therefore, the Risk Steward mechanism should immediately increase the Slope 2 parameter in the USDC deposit rate curve from about 10% to 40%, and within 5 to 7 days, confirm through governance voting to further raise the target to 50%. Meanwhile, the optimal utilization rate will be lowered from 92% to 87% during the transition, and after final confirmation, it will be reduced to 85%. According to Liao’s proposal, under the new parameter settings, when utilization reaches 100%, the maximum USDC deposit rate will increase from approximately 12.6% to 48.2%.