Circle chief economist floats higher USDC rates on Aave amid KelpDAO fallout
The Block
Circle's chief economist proposed raising USDC rates on Aave to address liquidity issues following the KelpDAO exploit.Summary
Gordon Liao, Circle's chief economist, has proposed increasing USDC lending rates on Aave v3 Ethereum Core to combat a liquidity squeeze caused by the KelpDAO exploit. The proposal aims to attract new deposits by significantly raising the supply rate, potentially to 40-50%, to incentivize capital inflow and bring the pool utilization below its stress point. This comes after the KelpDAO crisis led to a significant drop in Aave's Total Value Locked (TVL). However, the proposal faces criticism regarding potential liquidation risks for existing borrowers and questions about why Circle isn't providing direct liquidity support. Meanwhile, the KelpDAO exploiter has been observed converting stolen ETH into Bitcoin via THORChain.
(Source：The Block)