Aave uses a two-slope IRM. Below optimal utilization the rate rises slowly (slope1). Above the kink it escalates steeply (slope2) — designed to incentivize repayment and attract new deposits. The rate is instantaneous: it reacts to utilization changes immediately.
util ≤ optimal:
rate = base + slope1 × (util / optimal)
util > optimal:
rate = base + slope1
+ slope2 × (util − opt)
/ (1 − opt)Peak borrow APY: 0.0%. Spikes cluster with collateral drawdowns — debt grows while your collateral shrinks.
| Duration | Debt added | per $1M position |
|---|---|---|
| 1 hour | 0.0000% | $0 |
| 24 hours | 0.0000% | $0 |
| 72 hours | 0.0000% | $0 |
| 7 days | 0.0000% | $0 |
A leveraged position at 80% LTV can absorb maybe 1–2% of collateral drift before liquidation. A 7-day spike at peak rates adds ~0.00% to your debt — on top of any collateral price move. That's the squeeze.