Stable rate VS variable rate - Aave DeFi?

  • Aave Protocol
  • Borrow rate
  • Aave

What is the difference between stable and variable rate?

Answers 1

Stable rates act as a fixed rate in the short-term, but can be re-balanced in the long-term in response to changes in market conditions. The variable rate is the rate based on the offer and demand in Aave. The stable rate, as its name indicates, will remain pretty stable and it is the best option to plan how much interest you will have to pay. The variable rate will change over time and could be the optimal rate depending on market conditions. You can switch between the stable and variable rate at any time through your dashboard.