Aave V4's Arc market holds $76M USDC, less than $100K borrowed

Aave V4's Arc market holds $76M USDC, less than $100K borrowed

Aave V4 on the Arc Layer-1 network, the instance Aave Labs confirmed live on Sept. 16, had roughly $76 million of USDC supplied against less than $100,000 borrowed by Sept. 17, per Aavescan. Utilization sat near 0.1%, the lowest of any active Aave market. Aavescan also showed 0.00% supply and borrow APRs that day.

The Main Spoke, Arc's deposit door, opened with a 56 million USDC add cap and a 51 million USDC draw cap. LlamaRisk, Aave's risk service provider, said the add cap filled to 100% within hours of launch. It has proposed raising the cap to 150 million USDC, nearly tripling the supply ceiling while leaving the 51 million borrow cap unchanged.

What the zero APRs tell depositors

A 0.00% supply APR means LPs earn nothing from the protocol today. The Arc instance was set up under an ARFC governance proposal that committed Aave DAO to a minimum of $2 million per year in protocol revenue for the first five years, with shortfalls covered by Arc ecosystem participants.

That revenue flows from borrow interest and fees, not from idle deposits, so an empty borrow book means the backstop is what the deployers are paying for, not the depositors. Public launch data did not disclose whether separate rewards sit on top of the 0.00% supply rate, or whether a few addresses supplied most of the $76 million.

Why the supply cap filled so fast

Aave V4 routes assets through hubs and spokes: a hub holds liquidity, a spoke sets the maximum that can flow in (the add cap) and the maximum that can flow out (the draw cap). The Main Spoke's 56 million cap filled in hours, which signals demand to deposit, not demand to borrow. The 51 million draw cap is the number that would move if institutions or market makers actually wanted USDC on Arc. It has not moved.

The wider V4 picture

Arc is one of six hubs in Aave V4. LlamaRisk's snapshots put Aave's broader V4 deposits at $708.6 million on Sept. 16, up from $577.1 million a round earlier. Arc Core made up about $57.56 million of that, a different read from the later Aavescan number, which was newer and specific to Arc's USDC balance. The launch spoke was set to support USDC, EURC, WETH and cirBTC.

What to watch next

Whether the LlamaRisk proposal to lift the add cap to 150 million USDC passes governance and is executed on-chain. The governance post and live market page did not identify the replacement setting as executed when checked. Then whether the 51 million draw cap starts filling, which would mean real USDC borrow demand on Arc. The Aavescan Arc Core V4 reserve page was returning a 404 when checked, so live figures will need a re-pull.