Aave proposes USDG collateral rollover on X Layer

Aave is considering a proposal to rollover USDG collateral on its X Layer market. The plan involves replacing the expiring PT-USDG-29OCT2026 token with a new PT-USDG-25FEB2027 token maturing in February 2027.

Data indicates the proposed February token carries an implied yield of approximately 2.79% to 2.98%, which is lower than the borrowing rates for several stablecoins on the platform. For instance, borrowing rates were recorded at 4.12% for USDT0, 5.87% for USDC, and 3.75% for USDG. This discrepancy could result in negative carry for leveraged positions unless offset by incentives or fees.

The rollover mechanism, which may involve OKX for flash-loan integration, would allow users to transition their existing stablecoin debt into new positions with fixed yields. The proposed supply cap for the new February token is 35 million PT.