Aave raises GHO core borrow rate to 4.5 percent

The Aave protocol has raised its GHO borrowing rate on the Ethereum Core market to 4.5%, according to reports from The Defiant and CryptoSlate. CryptoBriefing also reported that the rate hike comes as redemption reserves for the algorithmic stablecoin ran thin. The Defiant noted that the GHO Risk Council also increased the base rate for Aave Prime, while the USDC conversion module on Ethereum remained nearly empty. [1][2][6]

CryptoSlate reported that the new 4.5% borrowing rate aligns GHO borrowing costs with the stablecoin savings rate that TokenLogic previously reported on Oct. 2. The adjustment is intended to close a yield gap that impacted stablecoin liquidity pools. The main operational challenge remains whether debt repayments will rebuild USDC and USDT liquidity for depositors who seek to convert withdrawn GHO tokens. [2]

Additional reports from Tokenpost, Pluang, and CryptoRank confirmed that the governance decision was driven by low reserve balances across Ethereum pools. The success of the rate adjustment will depend on funding duration, conversion routes, and incoming reserve flows over the coming market cycles. [2][3][4][5]