Borrowing rates for USDC, one of the most liquid dollar-pegged stablecoin, remain high on Aave and Compound v2, two of the world’s top decentralized protocols. According to Kaiko, a blockchain analytics platform, rates have ranged from 4% to 15% on Aave and around 13% on Compound.
It should be noted that this surge is when the crypto and decentralized finance (DeFi) scene is recovering after an extended “winter” that froze participation.
Borrowing USDC on Aave and Compound Is Expensive
Kaiko notes that the utilization rate for USDC on Aave has remained close to optimal levels, indicating steady demand for the stablecoin among borrowers, mainly in the second half of November. Looking at trends, it is evident that borrowing rates in Aave v2 have been stabilizing between 4% and 15% over the past week.
Meanwhile, on Compound v2, borrowing USDC has been more expensive than others, including USDT and DAI. The USDC borrowing rate is around 13%, much higher than borrowing Ethereum-based DAI or Tether Holding’s USDT.
There is no precise reason to explain this divergence. However, the reason why demand is varying could be multifaceted. One of the key reasons is that after…
