Under a November 12 proposal from TokenLogic, Aave lenders supplying $DAI on Polygon could see their share of borrower interest drop from 75% to 30%. The plan would send more interest to Aave’s DAO treasury, with cuts to lender returns varying across markets.
The November 12 proposal covers 54 reserves across 12 Aave V3 instances and Ethereum V2. Using November 9 balances and rates, TokenLogic estimates about $4 million in additional annualized DAO revenue. The figure includes roughly $1 million from Plasma USDT0, a change that would be added to the formal proposal only after its terms are finalized.
Aave’s reserve factor determines what portion of borrower interest goes to the DAO rather than suppliers. Increasing it changes how interest is divided, without directly changing the borrowing-rate curve. TokenLogic says the larger share would better compensate the DAO for risks associated with borrowable reserves.
Polygon $DAI lenders face a larger cut
Polygon V3 $DAI shows how significantly that allocation can affect returns. TokenLogic proposes increasing its reserve factor from 25% to 70%, with a modeled supply APY decline of 270 basis points, or 2.70 percentage points. The proposal projects an additional $94,373 in annual DAO revenue from this market.
If borrower interest remains unchanged, suppliers’ share would decline from 75% to 30%, with the treasury receiving the difference. In this fixed-input model, the DAO’s revenue gain comes from paying lenders less, without requiring increased borrowing or a higher price for the same loan.
The comparison among stablecoins indicates that the proposal would not impose the same yield cut across markets. TokenLogic models reductions of 173 basis points for Avalanche $DAI.e, 78 for Avalanche USDt, and 61 for Avalanche USDC. The proposed reserve factors are 90%, 25%, and 25%, respectively.
For people deciding where to lend stablecoins, the reductions affect the return for supplying liquidity to the reserves in question. TokenLogic describes Polygon $DAI as a legacy reserve and explicitly presents 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.
A 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 use different rate measures and refer to different dates. The modeled reduction is based on November 9 inputs.
The highest reserve-factor percentages would not necessarily mean the biggest yield reductions. TokenLogic proposes 100% factors for selected bitcoin-wrapper and liquid-staking collateral reserves, where lending APYs are already close to zero. Its model estimates that lost lending yield for this group would be no more than 1 to 2 basis points.
A 100% reserve factor applies to lending interest, not deposit principal. For wstETH, it is also distinct from staking accrual reflected in the token’s stETH value. Redirecting additional Aave lending interest would not affect that underlying accrual mechanism.
Revenue estimates assume balances and rates stay fixed
Plasma USDT0 illustrates how a relatively small yield cut could still produce a large revenue estimate. TokenLogic models raising the reserve factor from 5% to 7.5% against about $632 million in borrowing. It projects a 16-basis-point decline in supply APY and about $1 million in additional annual revenue. Inclusion remains conditional on finalized Plasma terms.
Annualizing November 9 balances and rates also assumes the inputs remain fixed for the other markets. The proposal aims to change supplier behavior, which could affect those inputs.
For Ethereum V2, TokenLogic proposes increasing the reserve factor on five remaining borrowed reserves to 99.99%, sending nearly all their interest to the DAO. TokenLogic expects lower returns to encourage suppliers to exit. If they withdraw, utilization could rise and borrowing costs could increase, potentially pressuring borrowers to close positions.
Aave’s utilization-based borrowing curve ties borrowing costs to the share of liquidity in use. Any such response would be separate from changing the curve itself, as with the $USDT borrowing-rule update CryptoSlate covered in October.
The November 12 publication identifies feedback and escalation to the Aave Improvement Proposal stage as next steps. The proposed yield cuts and revenue gains remain estimates.
