Term saw a quiet holiday week with around 1.3mm total volume cleared across all auctions and rates unchanged from the prior. Volumes were driven primarily by extensions/rollovers of outstanding borrows.
Historical ETH and USDC clearing rates on Term
Variable Rate Market
USDC Markets
In the variable rate markets, USDC rates continue to move the upside with borrow rates rising +39bps from 7.96% to 8.36% on a 30-day trailing basis.
Volatility in variable rate USDC markets continue to remain elevated across the board, though there is a governance vote from last week that was passed to raise the base rate from 5% to 6%. Given that 30-day trailing rate is now showing an 8-handle, it seems unlikely that this will be sufficient to satisfy market demand.
ETH Markets
ETH borrow rates on Aave V3 were unched on the week at 2.85% on a 30-day trailing basis, while the CESR Staking Index, on the other hand, saw a small dip due to dampened activity around the holidays.
Overall, supply continues to increase at a slightly faster rate than borrow demand helping to keep utilization steady just below the 80% UOPT level.
In a sign of stability, intraday highs in the ETH borrow rate have subsided, with just a single day in which rates exceeded the base rate of 2.80%.
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