Circle's Chief Economist, Gordon Liao, has proposed a significant increase in USDC borrow rates on Aave V3's Ethereum Core market following a $292 million exploit against KelpDAO. The proposal, submitted on April 22, 2026, suggests raising the Slope 2 rate from 10% to 40% immediately, with a follow-up vote to increase it to 50%. This move aims to restore liquidity after the exploit led to a severe liquidity crisis, with Aave's USDC pool reaching 99.87% utilization and available liquidity dropping below $3 million. The KelpDAO exploit on April 18 involved attackers exploiting a vulnerability in the DAO's bridge, leading to a massive outflow of assets from Aave, including WETH and stablecoins. The incident caused Aave's total value locked (TVL) to plummet by billions, affecting core markets like ETH, USDT, and USDC. Liao's proposal argues that increasing the kink-slope steeply would deter rate-insensitive borrowers and attract new USDC supply, helping to stabilize the market. The proposal has drawn attention from key stakeholders, including Circle CEO Jeremy Allaire and risk service providers like Llamarisk and Aave Labs.