Increase rsETH Supply Cap on Aave V3 Linea Instance

Simple Summary

This proposal seeks to increase the rsETH supply cap on the Aave V3 Linea instance to accommodate growing demand and prevent supply cap limitations that restrict user access.

Motivation

rsETH has demonstrated strong demand across Aave V3 deployments, with supply caps frequently reaching high utilization rates.

As a liquid restaking token that has proven its utility and risk profile across multiple Aave instances (Ethereum, Arbitrum, Base), increasing the supply cap on Linea will:

• Improve User Experience: Prevent users from being unable to supply rsETH when caps are reached
• Optimize Capital Efficiency: Allow more users to access rsETH-based strategies on Linea
• Support Network Growth: Enable the Linea ecosystem to capture more TVL and activity
• Maintain Competitiveness: Ensure Aave on Linea remains attractive for rsETH holders

While current cap increase via Risk Steward (100% per time lock period) does not accommodate the strong market demand for this asset, rsETH has demonstrated a strong track record across Aave deployments with:

• Proven liquidation mechanisms and oracle reliability
• Consistent performance across market conditions
• Active risk monitoring by service providers
• Established precedent on other networks

Specification

References

• Implementation: AaveV3Linea
• Tests: AaveV3Linea
• Snapshot: Direct-to-AIP
• Discussion

Copyright

Copyright and related rights waived via CC0.