Aave V4's Arc Market Fails to Prove Itself as a Credit Hub

Aave V4's Arc market has attracted $76 million in USDC, but less than $100,000 of that was borrowed as utilization hovered near 0.1%.

This is according to data from Aavescan, which showed a low borrowing rate on Sept. 17, the day after Aave V4 went live on the Arc Layer-1 network.

The high supply of USDC in the market, but low demand for borrowing, has led some to suggest increasing the add cap to 150 million USDC, which would expand deposits without increasing the draw cap.

This move is seen as a way to improve the market's ability to serve future borrowers, but actual draws are needed to prove that users value the capacity as credit rather than just a place to park USDC.