# Risk Stewards: USDC IRM changes / 2026.08.28

**URL:** https://forum.tydro.com/t/risk-stewards-usdc-irm-changes-2026-08-28/13
**Category:** Governance
**Created:** [August 28, 2026, 4:46pm UTC](https://forum.tydro.com/t/risk-stewards-usdc-irm-changes-2026-08-28/13 "2026-08-28T16:46:16Z")
**Posts on this page:** 1
**Page:** 1

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### Author: ![LlamaRisk](https://yyz2.discourse-cdn.com/flex034/user_avatar/forum.tydro.com/llamarisk/32/27_2.png) [@LlamaRisk](https://forum.tydro.com/u/LlamaRisk)
#### Post date: [August 28, 2026, 4:46pm UTC](https://forum.tydro.com/t/risk-stewards-usdc-irm-changes-2026-08-28/13/1 "2026-08-28T16:46:16Z")

</div>

## **Summary**

LlamaRisk recommends the following parameter changes to target a 6.5% APY borrow rate for USDC.

- Change baseRate for USDC on Tydro from 650 bps (6.50% APR) to 630 bps (6.30% APR)

### **Rationale**

On August 26th, a parameter change transaction modified the interest rate model of USDC to a fixed rate of 6.5% APR. On-chain, the current IRM configuration for USDC on Tydro is optimalUsageRatio 95%, baseVariableBorrowRate 650 bps, with slope1 and slope2 both set to 0, so the base rate alone sets the borrow rate at any utilization. After this change, the effective borrow rate will be 6.5% APY.

Aave accrues variable borrow interest per second. The IRM outputs an APR stored in ray units, and the variable debt index compounds it each second, so the effective annual rate displayed as APY is:

 ![image](https://canada1.discourse-cdn.com/flex034/uploads/tydro/original/1X/f76b8fd74bb3eb78270994f382a60af7c25af3f9.png)

Inverting for the APR that produces a 6.5% APY:

![image](https://canada1.discourse-cdn.com/flex034/uploads/tydro/original/1X/5a3b98e214b774ed24d5607bbe565b0e3815c3a2.png)

Per-second compounding is numerically indistinguishable from continuous compounding, so the conversion reduces to APR = ln(1 + APY). Note that the IRM contract stores rate parameters at basis point granularity (uint32 bps), so the closest attainable on-chain setting is 630 bps (6.30% APR), which produces an effective borrow rate of 6.5027% APY.

## **Specification**

| **Instance** | **Asset** | **Current baseRate** | **Recommended baseRate** |
| --- | --- | --- | --- |
| Tydro | kBTC | 650 bps (6.50% APR) | 630 bps (6.30% APR) |

## **Next Steps**

We will move forward and implement