Aave V4 Goes Live With Circle’s Arc Chain, and Within Less Than a Day It Has Stockpiled a USDC Liquidity Traffic Jam.
As of September 17, the amount of USDC deposited in the Arc market is about $76 million, while the amount borrowed is under $100,000—leaving a capital utilization rate of roughly 0.1%. On the day of launch, the deposit cap of 56 million USDC was filled within just a few hours. Risk firm LlamaRisk has proposed raising the cap to 150 million.
The supply side is showing tremendous enthusiasm, but the demand side has barely moved. On the protocol interface, both deposit and borrow APRs have essentially stalled at 0.00%. Right now, this market looks more like a transit stop for large idle funds, far from a true credit venue. Next, what really needs to be watched is whether the borrowing scale, utilization rate, and interest rates will start to rise as well. Only when the real money is actually borrowed will Arc be said to have successfully completed the credit loop.
$USDC $AAVE
As of September 17, the amount of USDC deposited in the Arc market is about $76 million, while the amount borrowed is under $100,000—leaving a capital utilization rate of roughly 0.1%. On the day of launch, the deposit cap of 56 million USDC was filled within just a few hours. Risk firm LlamaRisk has proposed raising the cap to 150 million.
The supply side is showing tremendous enthusiasm, but the demand side has barely moved. On the protocol interface, both deposit and borrow APRs have essentially stalled at 0.00%. Right now, this market looks more like a transit stop for large idle funds, far from a true credit venue. Next, what really needs to be watched is whether the borrowing scale, utilization rate, and interest rates will start to rise as well. Only when the real money is actually borrowed will Arc be said to have successfully completed the credit loop.
$USDC $AAVE