Aave Stablecoin Markets Tighten Again as Borrowing Rates Surge

The Aave stablecoin markets are experiencing another round of tightening, according to recent data from Ethereum core. This means that borrowing rates are increasing as available liquidity is being absorbed.

Ethereum core USDT and USDC are both sitting at around 93% utilization, with borrow rates in the 4.4-4.8% range. Meanwhile, Plasma USDT0 is near 94% utilization.

What's notable here is that deposits are still expanding while borrowing is absorbing nearly all of the available liquidity. This pressure shows up directly in the rate curve, as higher utilization means borrowing becomes more expensive due to reduced float.