Summary
This proposal seeks to make adjustment to the interest rate models on the Euler Yield market. Lowering interest rates in line with prevailing yield conditions in DeFi and is expected to increase borrow demand and capital efficiency on the market.
Rationale
The USDC vault, which is the primary loan asset in the market, has stayed at 40-50% utilization for a long time. Lowering interest rates for non-yield-bearing vaults is expected to unlock another $6M of borrow demand in the vault.
Furthermore, Euler Yield USDE was wrongly configured with the template IRM for yield-bearing assets. This proposal changes its IRM in line with the other non-yield-bearing assets. Thanks to @daffy for pointing this out.
Parameters
All rates are borrow APY. Modified values in bold.
| Asset | Base rate | Kink | Rate at kink | Rate at 100% (max) |
|---|---|---|---|---|
| USDC, USDT, wM, PYUSD, DAI, FDUSD, USDS, USD0, RLUSD | 0% | 90% | 16.18% → 8% | 101.38% → 80% |
| USDE | 0% | 30% → 90% | 12.85% → 8% | 848.77% → 80% |
Author
Objective Labs is a service provider for Euler Labs tasked with product development, risk management, and incentive optimization. Objective Labs is Euler-aligned.