Aave raises USDT borrowing costs sooner as liquidity tightens

Aave lowered the USDT rate kink on its Ethereum V3 Core market from 94% to 92%, so variable borrow rates now climb earlier as utilization rises Borrowing USDT on Aave just got pricier, at least when the pool starts running dry. On October 21, 2026, Aave lowered the utilization point where its USDT interest rates shift into a higher gear on the Ethereum V3 Core market. The threshold, known as the “kink,” moved from 94% to 92%. Two percentage points sounds tiny. For a borrower sitting in a pool that is nearly tapped out, it changes the math considerably. What changed on Aave’s USDT market Aave prices loans with what is called a two-slope interest rate model. Below the kink, rates rise slowly along the first slope. Above it, the second, much steeper slope takes over. The change took effect at block 26,241,799. It followed a recommendation that DeFi risk management firm LlamaRisk made on October 20, 2026, one day before the switch flipped. Only the kink moved. The rest of the curve stays exactly where it was: Base rate: 0% Slope 1: 4.5% Slope 2: 10% Borrow rate at full utilization: 14.5% Take a pool running at 94% utilization. Under the old setup, that level sat right at the kink, so t...