The GHO Risk Council has increased the core borrowing rate for the GHO stablecoin on Ethereum to 5%. This adjustment follows a proposal from TokenLogic on October 2, 2026, which initially suggested raising the rate from 4.25% to 4.50%. The Prime market also saw its base rate rise from 2.75% to 3.00%, with the kink rate increasing to 4.25%.
These changes are intended to align borrowing costs with the 4.50% Aave Savings Rate, eliminating incentives for users to mint GHO solely for yield farming. The council implemented these updates using the updateGhoBorrowRate function, which allows for rate adjustments within predefined limits without requiring a full governance vote.
The decision comes as GHO has traded near $0.999 throughout September and early October 2026. The USDC conversion module, a key tool for maintaining the stablecoin's peg, is currently depleted, while the USDT module holds approximately 22.5 million USDT. Higher borrowing costs are expected to encourage loan repayments and help refill these stability modules.
This marks the third rate increase in approximately three months. In August 2026, the Core borrow rate was raised from 3.75% to 4.25%. The protocol continues to monitor the stability modules, noting that further rate adjustments may be necessary if the USDT pool continues to shrink and the GHO price remains below its target.
