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Aave's proposed USDG token shows lower yield and uncertain rewards
Aave has proposed a new USDG principal token for February. The token's implied annual yield based on the October 10 snapshot is about 2.98%, which is lower than the quoted borrowing rates for USDT, USDC and USDG. USDG is intended as a cost comparator rather than a listed borrowing option in the suggested configuration. Borrowing additional assets would reduce returns before rewards and could lead to negative net yields when funding costs exceed the earned yield. Eligibility for February rewards has not yet been established. Both Aave's listing of the token and OKX's separate rollover integration still need to be implemented. The proposal highlights higher borrowing costs and uncertainty around reward distribution.