Supply/Borrow Cap Updates V3 Arbitrum, Optimism, Polygon
01Summary
Adjust supply and borrow caps for 23 risk parameters across 14 assets on Aave V3 Polygon, Arbitrum, and Optimism. Most adjustments reduce excessively high caps on stablecoins (DAI, USDC, USDT, EURS, sUSD) to 16-60% of circulating supply, increase caps for assets at >75% utilization (WETH, LINK on Optimism), and freeze or reduce supply on certain assets (AAVE, WBTC) to manage risk. Four assets (GHST, SUSHI, BAL, AAVE on Arbitrum) remain unchanged due to liquidity concerns despite high utilization.
- Type
- parameter change
Key changes
- Arbitrum DAI: Supply cap reduced from 2,000,000,000 to 50,000,000; new borrow cap of 30,000,000 (38% of circulating supply)(high)
- Arbitrum USDC: Supply cap reduced from 2,000,000,000 to 150,000,000; new borrow cap of 100,000,000 (16% of circulating supply)(high)
- Arbitrum USDT: Supply cap reduced from 2,000,000,000 to 50,000,000; new borrow cap of 35,000,000 (20% of circulating supply)(high)
- Arbitrum EURS: New supply cap of 60,000 and borrow cap of 45,000 (60% of circulating supply)(medium)
- Arbitrum AAVE: Supply cap reduced from 2,500 to 1,850 (frozen supply)(high)
- Optimism DAI: Supply cap reduced from 2,000,000,000 to 25,000,000; new borrow cap of 16,000,000 (35% of circulating supply)(high)
- Optimism USDC: Supply cap reduced from 2,000,000,000 to 150,000,000; new borrow cap of 100,000,000 (43% of circulating supply)(high)
- Optimism USDT: Supply cap reduced from 2,000,000,000 to 25,000,000; new borrow cap of 16,000,000 (47% of circulating supply)(high)
Notable concerns
- Four assets (GHST, SUSHI, BAL on Polygon and AAVE on Arbitrum) at >75% utilization not recommended for cap increases due to current liquidity levels
- Multiple stablecoins had excessive supply caps (up to 2 billion) with no borrow caps previously, creating concentration risk
- Supply caps on some assets represent >50% of total on-chain circulating supply before adjustment
Generated by Kvorum
02Description
Simple Summary
A proposal to adjust twenty-three (23) total risk parameters, including Supply Cap and Borrow Cap, across fourteen (14) assets on Aave V3 Polygon, Arbitrum,and Optimism.
Motivation
The objective of this proposal is to recommend updated supply and borrow caps for:
- V3 stablecoins that have excessive supply caps set and/or have no set borrow cap.
- The caps are intended to allow for substantial growth compared to the current supply while not set too excessively.
- The recommendations for the supply caps are set to up to 40% of the circulating supply for most assets and no more than 60%. You can find the exact number for each asset in the tables below. Borrow caps are set to ~65% of the supply cap.
- V3 assets that have reached over 75% utilization of either cap.
- The recommendations provided in this proposal were derived using Chaos Labs’ Updated Supply and Borrow Cap Methodology. Below are the data and considerations for the assets and recommended caps for these assets.
- Assets with a supply cap that is >50% of the asset's total on-chain circulating supply.
There following assets are at >75%. However, we do not recommend increasing their caps at this time due to current liquidity levels:
GHST (V3 Polygon) SUSHI (V3 Polygon) BAL (V3 Polygon) AAVE (V3 Arbitrum)
The respective governance forum discussion is linked below:
Specification
The following risk parameter proposal is presented below:
Arbitrum
| Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap | Notes |
|---|---|---|---|---|---|
| DAI | 2,000,000,000 | 50,000,000 | N/A | 30,000,000 | 38% of the circulating supply |
| EURS | N/A | 60,000 | N/A | 45,000 | 60% of the circulating supply |
| USDC | 2,000,000,000 | 150,000,000 | N/A | 100,000,000 | 16% of the circulating supply |
| USDT | 2,000,000,000 | 50,000,000 | N/A | 35,000,000 | 20% of the circulating supply |
| AAVE | 2,500 | 1,850 | N/A | N/A | freezes supply |
Optimism
| Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap | Notes |
|---|---|---|---|---|---|
| DAI | 2,000,000,000 | 25,000,000 | N/A | 16,000,000 | 35% of the circulating supply |
| sUSD | 20,000,000 | No Change | N/A | 13,000,000 | 25% of the circulating supply |
| USDC | 2,000,000,000 | 150,000,000 | N/A | 100,000,000 | 43% of the circulating supply |
| USDT | 2,000,000,000 | 25,000,000 | N/A | 16,000,000 | 47% of the circulating supply |
| AAVE | 100,000 | 45,000 | N/A | N/A | freezes supply |
| LINK | 258,000 | 160,000 | 141,900 | 84,000 | |
| WBTC | 1,100 | 620 | 605 | 250 | freezes supply |
Polygon
| Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|
| WETH | 26,900 | 50,000 | 14,795 | No Change |
| AAVE | 36,820 | 70,000 | N/A | N/A |
References
Tests: Arbitrum, Polygon, Optimism
Proposal payload implementation: Arbitrum, Polygon, Optimism
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal describes risk-parameter (supply/borrow cap) updates across three networks (Arbitrum, Optimism, Polygon) via three separate payload contracts referenced by GitHub links. The decoded calldata shows exactly three actions, each an execute(address) call to a distinct cross-chain governance executor address, passing a distinct target payload address as argument — this matches the standard Aave cross-chain governance pattern (mainnet governance triggers bridged execution of a payload contract on each L2). The count (3) and structure (one execute per chain) align with the description's claim of three chains and three payload implementations. However, because the actual cap-setting logic (the 23 specific parameter changes across 14 assets) lives inside the target payload contracts and is not itself decoded in the provided calldata, I cannot directly verify the specific numeric values (e.g., DAI cap of 50,000,000 on Arbitrum) against on-chain state. This is typical of Aave's governance structure and not itself a red flag, but it does limit verification confidence to medium rather than high. No mismatches in target count, chain count, or general action type were found between the prose and the decoded actions.
Generated by Kvorum
04Actions
- Target
- 0x158a…d45b
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0xeca5bdf0C2b352cBE2D9A19b555E1EC269d4765C" }- Calldata
- Target
- 0x2e2b…05f1
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0x060Bea15AF594FE9e0A243cA632F2C7D1935C70f" }- Calldata
- Target
- 0x5f5c…6711
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0x3A4F2A6c7E1E641AFAd6300553a0Bb82D6c46a2e" }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
No forum thread is confidently linked to this proposal.
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