Aave V4 Arc Holds $76M USDC as Borrowing Nears Zero

Aave V4’s Arc market opened on Sept. 16 and drew roughly $76 million in USDC deposits by Sept. 17, while less than $100,000 was borrowed during the same window, leaving utilization at about 0.1% according to on-chain protocol data.

Arc Core’s Main Spoke started with an initial add cap of 56 million USDC and a draw cap of 51 million USDC. The add cap reached full capacity within hours of launch, and the reported USDC balance later exceeded the original 56 million ceiling. The protocol’s public pages did not list the exact replacement setting after the ceiling was passed.

A proposal was made to raise the Main Spoke add cap from 56 million to 150 million USDC. Raising the add cap would allow more deposits to enter through the spoke without changing the 51 million USDC draw cap that limits how much can be borrowed through that spoke.

Aave’s architecture groups liquidity into hubs and directs deposits and borrowing through spokes. A hub holds pooled assets, while a spoke controls how much of an asset it can add to the hub (add cap) and how much can be borrowed through that path (draw cap). In Arc’s case, supply capacity available to depositors exceeded the amount borrowers could draw under the initial draw cap.

Interest-rate displays for the market showed 0.00% supply and borrow APRs at the time of the checks on Sept. 17. Under Aave’s interest-rate framework, hub liquidity pricing is determined by utilization: when little capital is borrowed, base rates stay low. Public launch documentation did not specify whether separate reward programs were active or whether a small number of addresses provided a large share of the supplied USDC.

Broader V4 snapshots of protocol liquidity showed deposits across six hubs increasing from $577.1 million to $708.6 million between two recent data collections. In one snapshot Arc Core represented about $57.56 million of that total, while the later point-in-time reading recorded roughly $76 million in Arc’s USDC balance.

Observers point to borrowed USDC, utilization and interest rates as the metrics to monitor for signs of increased borrowing activity. For now, on-chain figures show substantial deposits into Arc alongside minimal borrower uptake.