Aave's GHO Risk Council raised the GHO borrowing rate on Ethereum Core to 4.50% from 4.25% on October 3, moving to close a gap with the 4.50% savings rate paid on sGHO. The council also lifted Prime's base rate, while the stablecoin's USDC conversion reserves sat nearly empty.
Aave's GHO Risk Council raised the stablecoin's Core borrowing rate on Ethereum to 4.50% from 4.25% on October 3, aiming to help refill reserves used to convert GHO into USDC and USDT. The transaction was recorded at 5:37 p.m. ET and also pushed Ethereum Prime's base rate up to 3% from 2.75%.
Closing the gap with sGHO
The council acted through its GhoAaveSteward contracts, carrying out changes TokenLogic, a GHO Stewards service provider, laid out in an October 2 notice. The Core increase closes a 25-basis-point gap with the 4.50% savings rate TokenLogic reported for sGHO. Previously, borrowers could pay 4.25% for GHO and deposit it into the savings product at 4.50%, with the DAO funding the difference — a tension present since sGHO was proposed. The higher cost applies to outstanding variable-rate debt, not just new loans.
Core's rate is flat across utilization levels, but Prime's varies with it. Prime's rate at the 92% target utilization level rose to 4.25% from 4%, while its utilization target and slope parameters stayed unchanged. On October 5, Aavescan showed 114.7 million GHO of Core borrowing, and Prime carried a 4.17% borrow APR against a 3.24% supply APR at 86.35% utilization.
Conversion reserves run thin
TokenLogic's notice cited depleted USDC reserves in the GHO Stability Module and declining redemption reserves overall. These modules let holders swap GHO for other stablecoins. The Ethereum USDC module held only a few cents' worth of wrapped Aave USDC when checked on October 5. The USDT module, meanwhile, held roughly $22.5 million of wrapped Aave USDT, according to Etherscan.
A higher borrow rate can encourage repayment, but it does not automatically refill those modules. Borrowers who buy GHO on the secondary market can support its price, while those who exchange USDC or USDT for GHO through a GSM replenish that module's reserves directly, TokenLogic explained. GHO traded near $0.999 for much of September and early October 2026, and this marks the third time in roughly as many months that Aave has adjusted the rate — it raised the Core rate from 3.75% to 4.25% in August 2026 before this week's move.
For sGHO holders, withdrawing shares and converting that GHO into another stablecoin remain separate steps. Aave's documentation says shares redeem into GHO without a cooldown, but turning that GHO into USDC or USDT still depends on available conversion liquidity.
Sources: The Defiant, Crypto Briefing
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