Aave and Compound Users Are Paying More Than 20% For Stablecoin Loans

The interest rates for borrowing major stablecoins on Aave, the largest DeFi money market protocol, have ballooned to more than 20%, indicating that speculators are highly leveraged despite markets posting a slight pullback. Aave data shows the annual percentage yield (APY) paid on deposits to the platform in the form of Tether (USDT) and USD Coin (USDC) peaking at 17.6% and 24.6% on Dec. 3, while borrowers paid a peak of 23% and 28.14% to maintain loans on the platform. At the time of writing, users have borrowed $2.21 billion or 93.6% of the $2.36 billion in USDT supplied to Aave, while $1.85 billion or 94.4% of the $1.98 billion USDC supplied is currently loaned out to users. The high utilization rates have pushed USDT rates to their highest level in 12 months, while USDC rates are at their highest level in more than one year. To continue reading this as well as other DeFi and Web3 news, visit us at thedefiant.io