Quick Take
- Aave’s proposed interest split would cut Polygon DAI lenders’ share from 75% to 30%, without directly changing the borrowing-rate curve.
- Polygon DAI faces a modeled 2.70 percentage point APY cut, while selected collateral reserves would lose minimal lending yield.
- Plasma USDT0’s modeled annual revenue contribution remains conditional on finalized terms, and supplier exits could alter the proposal’s fixed inputs.
Aave lenders supplying DAI on Polygon could see their share of borrower interest fall from 75% to 30% under a November 12 proposal by TokenLogic. The plan would redirect more interest to Aave’s DAO treasury, with uneven cuts to lender returns across its markets.
The November 12 proposal covers 54 reserves across 12 Aave V3 instances and Ethereum V2. TokenLogic estimates about $4 million in additional annualized DAO revenue using November 9 balances and rates. That total includes roughly $1 million from Plasma USDT0, a change that would enter the formal proposal only once its terms are finalized.
In Aave’s lending system, the mechanism is the reserve factor: the portion of borrower interest allocated to the DAO instead of suppliers. Raising it changes who receives the interest, without directly changing the borrowing-rate curve. TokenLogic argues the larger share would better compensate the DAO for the risks attached to borrowable reserves.
Polygon DAI lenders face a larger cut
Polygon V3 DAI illustrates how much that allocation can matter. TokenLogic proposes raising its reserve factor from 25% to 70%, with a modeled supply APY reduction of 270 basis points, or 2.70 percentage points. The same line projects $94,373 in additional annual DAO revenue.
With the amount of borrower interest unchanged, suppliers’ share would fall from 75% to 30%. The treasury would receive the difference. In that fixed-input model, the revenue gain comes from a smaller payment to lenders, without requiring more borrowing or a higher price for the same loan.
A bigger DAO share comes from suppliers’ interest
Polygon DAI illustrates TokenLogic’s November 12 proposal: the interest allocation changes while the model holds borrowing and rates fixed.
The proposed 70% reserve factor leaves suppliers 30% of borrower interest, down from 75%.
Proposal-listed current and proposed factors, not execution evidence. Total borrower interest is held fixed; subsequent liquidity or rate responses can change realized income. The shares concern lending interest, not deposit principal.
Sources and evidence
Sources
Supporting facts
- For Polygon DAI, the proposed reserve factor would reduce suppliers’ share of borrower interest from 75% to 30%, with borrower interest otherwise unchanged. [1] [2]
- TokenLogic proposes raising Polygon V3 DAI’s reserve factor from 25% to 70%, with a modeled supply APY reduction of 270 basis points, or 2.70 percentage points, and $94,373 in additional annual DAO revenue. [1]
- The reserve factor allocates borrower interest between suppliers and the DAO; raising it redirects existing interest without directly changing the borrowing-rate curve. [1] [2]
Method
Supplier share = 100% minus reserve factor: 100-25=75 and 100-70=30. DAO share rises by 70-25=45 percentage points. Verified with JavaScript arithmetic; bar widths scale linearly to a fixed 600-unit desktop or 312-unit mobile interest pool. This is derived allocation arithmetic, not an APY calculation.
Scope
Proposal-listed current and proposed factors, not execution evidence. Total borrower interest is held fixed; subsequent liquidity or rate responses can change realized income. The shares concern lending interest, not deposit principal.
CryptoSlateThe comparison with other stablecoins shows that the proposal does not apply a uniform yield reduction. TokenLogic models cuts of 173 basis points for Avalanche DAI.e, 78 for Avalanche USDt and 61 for Avalanche USDC. Their proposed reserve factors are 90%, 25% and 25%, respectively.
For savers choosing where to lend stablecoins, those reductions change the return offered for keeping liquidity in the affected reserve. TokenLogic identifies Polygon DAI as a legacy reserve and explicitly uses lower returns as an incentive to move liquidity out of declining markets.
Modeled supply APY changes in TokenLogic’s November 12 proposal using November 9, 2026 balances and rates. Negative values are reductions; 100 basis points equals 1 percentage point. Selected reserves, not the complete proposal.
CryptoSlateA separate Aavescan observation puts the Polygon DAI pool in perspective. Its November 12 midnight-UTC snapshot records 3.30 million DAI deposited, 2.65 million borrowed and a 4.81% supply APR, excluding historical incentives.
Aavescan’s observed APR and TokenLogic’s modeled APY reduction, based on November 9 inputs, describe different rate measures at different dates.
The largest reserve-factor percentages do not necessarily impose the largest yield cuts. TokenLogic proposes 100% factors for selected bitcoin-wrapper and liquid-staking collateral reserves whose lending APYs are already close to zero. Its model puts the lost lending yield in that group at no more than 1 to 2 basis points.
A 100% reserve factor applies to lending interest, not deposit principal. For wstETH, it is also separate from the staking accrual reflected in the token’s stETH value. Redirecting Aave’s incremental lending interest would leave that underlying accrual mechanism intact.
The revenue estimate holds balances and rates fixed
Plasma USDT0 shows why a modest yield cut can still produce a large revenue estimate. TokenLogic models a reserve-factor increase from 5% to 7.5% against about $632 million borrowed. The projected supply APY reduction is 16 basis points, alongside about $1 million in additional annual revenue. Its inclusion remains conditional on finalized Plasma terms.
Even for the other lines, annualizing November 9 balances and rates holds the inputs fixed. The proposal also seeks to change supplier behavior, which could alter those inputs.
For Ethereum V2, TokenLogic proposes raising five remaining borrowed reserves to 99.99%, directing nearly all their interest to the DAO. It expects reduced returns to encourage exits. If suppliers withdraw, utilization could rise and borrowing costs could increase, creating pressure on borrowers to close positions.
Aave’s utilization-based borrowing curve links borrowing costs to how much liquidity is in use. That potential response is separate from changing the curve itself, as in the USDT borrowing-rule update CryptoSlate covered in October.
The November 12 publication lists feedback and escalation to the Aave Improvement Proposal stage as next steps. Its yield cuts and revenue gains remain proposed estimates.
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