Aave USDe Borrow Rate Hike Threatens Ethena Yield Loops
Aave (AAVE)
Editor:
Eugene Serbin
Cvj.ai reports that LlamaRisk has proposed raising borrowing costs for Ethena’s USDe across five Aave V3 markets to curb recursive leverage. The recommendation targets Core, Plasma, Monad, Mantle, and Avalanche, increasing the base variable borrow rate from 5% to 6% while reducing Slope1 by one percentage point. This structural shift aims to squeeze leveraged yield strategies that recycle USDe into yield-bearing sUSDe.
At current utilization levels, modeled borrower APRs would rise between 13 and 89 basis points depending on the specific market. Avalanche, with 69.9% utilization, sees the smallest increase to 6.87%, while low-utilization Mantle jumps to 6.21%. Core, Plasma, and Monad see increases to 6.36%, 6.53%, and 6.38% respectively.
TokenLogic noted that this higher borrowing floor should reduce loops and could lift remaining sUSDe yields toward 5.3% as supply unwinds. By September 10, sUSDe supply APY sat at 4.72%, creating negative carry against borrow APRs above that level in several markets. The proposal reflects Aave’s risk management efforts, though it remains subject to governance before implementation.
How the market reacted
Whalio's own Binance spot order flow for AAVE, measured when this story was written up on 11 September 2026. Not the outlet's figures.
Aave (AAVE) is trading at $120.64 with a 1-hour buy ratio of 36.6% and a 4-hour buy ratio of 48.8%, indicating that short-term buying pressure is fading compared to the 24-hour buy ratio of 51.1%. The 1-hour volume delta is -$72,011, showing net selling in the immediate term, while the 4-hour delta is -$23,030, suggesting sustained outflows over the recent four-hour window. In contrast, the 24-hour volume delta is positive at +$253,110, with cumulative volume delta (CVD) at +$455,464, indicating that buying pressure has been stronger over the full day than in the last few hours. The 24-hour spot volume is $11,312,938 across 130,053 trades, with net buying occurring in 14 of the last 24 hours. This divergence suggests that while the day has seen net inflows, the most recent activity is shifting toward selling.
The latest daily buy ratio of 49.8% sits at the 52nd percentile of the last 324 days, against a median of 49.8% - ordinary for this coin.
Was that an ordinary day?
The same Binance spot measurements for AAVE, averaged over the days leading up to the story.
Over the preceding week, AAVE has experienced a 9.1% price decline with a total volume delta of -$3,911,153. The 7-day average buy ratio is 47.9%, meaning the current 24-hour buy ratio of 51.1% is 3.2 percentage points higher than the weekly average. However, the 24-hour spot volume of $11,312,938 is only 0.78 times the weekly average, indicating lighter trading activity than usual. Unlike the current day, which had 14 hours of net buying, the preceding week saw zero days of net buying. This suggests that while today’s buying ratio is relatively strong compared to the week’s norm, the overall trend remains bearish with lower volume and a significant price drop.