USDe Yield Loop Falls Through: Borrowing Costs More Than Deposit Brings In

The yield on staked USDe has fallen below the borrow rate for USDe on Aave, making it no longer profitable to participate in a leveraged loop that converts sUSDe into USDe and back again.

This change occurred on September 9, 2026, when LlamaRisk, a risk service provider partly funded by the Aave DAO, submitted a recommendation to increase the base rate for USDe to 6.00 percent and decrease Slope1 by 1 percent across five Aave V3 instances.

The borrow rates for USDe on these markets currently stand between 6.02 and 6.39 percent, while the yield on staked USDe is 5.01 percent. This means that every additional round of the loop worsens the result compared to simply holding sUSDe.