KVORUM
aaveSource: Aave governor v2 · #205

Supply/Borrow Cap Updates V3 Arbitrum

defeatedApr 21, 2023, 12:25 PM UTCbyBC0xbc54…7df0

01Summary

AISummary by Kvorumclaude-haiku-4-5

Proposal to increase supply and borrow caps for WBTC and WETH on Aave V3 Arbitrum. WBTC supply cap doubles from 2,100 to 4,200 with no borrow cap change. WETH supply cap increases from 45,000 to 70,000 and borrow cap doubles from 11,165 to 22,000.

Type
parameter change

Key changes

  • WBTC supply cap increased from 2,100 to 4,200 (100% increase)(high)
  • WETH supply cap increased from 45,000 to 70,000 (55.6% increase)(high)
  • WETH borrow cap increased from 11,165 to 22,000 (97.1% increase)(high)
  • WBTC borrow cap remains unchanged(low)

Notable concerns

  • Parameter adjustments were derived from Chaos Labs' Updated Supply and Borrow Cap Methodology
ContractsAave V3 Arbitrum WBTCAave V3 Arbitrum WETH
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model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
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02Description

175 words

Simple Summary

A proposal to adjust three (3) total risk parameters, including Supply Cap and Borrow Cap, across two (2) Aave V3 Arbitrum assets.

Motivation

The objective of this proposal is to recommend updated supply and borrow caps for V3 assets that have reached high utilization of either cap. The recommendations provided in this proposal were derived using Chaos Labs’ Updated Supply and Borrow Cap Methodology

The respective governance forum discussion is linked below:

Specification

The following risk parameter proposal is presented below:

Arbitrum

AssetCurrent Supply CapRecommended Supply CapCurrent Borrow CapRecommended Borrow Cap
WBTC2,1004,2001,115No Change
WETH45,00070,00011,16522,000

References

Forum Post: Arbitrum Post

Test: Arbitrum Test

Proposal payload implementation: Arbitrum Payload

Copyright

Copyright and related rights waived via CC0.

03Mismatch analysis

AIMismatch analysis by Kvorummedium confidenceclaude-sonnet-5
Consistent

The proposal follows Aave's standard governance pattern: a single top-level `execute(address)` call on the governance executor that delegatecalls into a payload contract containing the actual `setSupplyCap`/`setBorrowCap` logic. The decoded calldata here only surfaces this outer execute() call and the payload address (0xC4421...), not the internal calls the payload makes. This is expected and typical for Aave V3 cross-chain proposals — the granular parameter changes live inside the payload contract's bytecode, which is separately referenced and auditable via the 'Proposal payload implementation' and 'Test' links in the description (AaveV3ArbSupplyCapsUpdate_20230330.sol). Since the target address in the decoded action is consistent with what the description points to as the payload implementation, and no other actions, transfers, or unrelated calls are present, there is no evidence of a target mismatch, extra action, or omitted action at the level we can observe. However, because the specific cap values (4200 WBTC supply cap, 70000/22000 WETH caps) cannot be independently verified from the flat decoded calldata (they're inside the payload's internal logic), confidence is medium rather than high. No numeric or targeting discrepancy is evident from the available data, so this proposal is treated as consistent with the description, contingent on the payload matching its referenced source code.

Generated by Kvorum
model: claude-sonnet-5
provider: anthropic
profile: anthropic-strong-v1
prompt: v1.0
generated: 2mo ago
Review the decoded actions ↗

04Actions

1 total
#0execute(address)chain 0x1
Target
0x5f5c…6711
Value
0 wei
Function
execute(address)
Arguments
{
  "0": "0xC4421Eaf9087aa0B8f453C130Dc024c3Eb3A34D7"
}
Calldata

05Tally

Summed from votes

Voters10
VP participating446.6K
Outcome (current)Against
Current support46.7%

06Voters

10 total

No votes recorded yet.

07Forum

AIForum synthesis by Kvorumclaude-sonnet-5
sentiment · mixedthread · constructive

Arguments for

  • Applying the Aave V3 Caps Framework methodology, several assets (WBTC, WETH, wstETH on Arbitrum and Optimism) have reached over 75-100% utilization of their caps and warrant increases to avoid constraining supply/borrow activity.— ChaosLabs
  • Raising the wstETH Optimism supply cap now would support ongoing efforts with Lido DAO to bring OP and LDO incentives to wstETH on Optimism, avoiding the need for a separate future proposal.— MatthewGraham
  • A more conservative version of some cap increases (e.g., WETH supply cap, WBTC supply cap) is still warranted even amid caution, per Gauntlet's own methodology.— Pauljlei

Arguments against

  • Increasing the wstETH supply cap or WETH borrow cap ahead of the Shanghai Upgrade is risky because whales may aggressively pursue the wstETH-wETH trade to capture staking rewards before the upgrade, and on-chain liquidity on Arbitrum may not support large liquidations for these positions.— Pauljlei
  • Given the Ethereum-correlated eMode pool on Arbitrum (90% LTV, 93% LT) for wstETH/wETH, large cap increases pose heightened liquidation risk, echoing concerns previously raised about cbETH supply cap increases on Ethereum mainnet.— Pauljlei
  • wstETH supply cap increases should be postponed on both Arbitrum and Optimism until after the Shanghai Upgrade (April 12) to reassess risk for all Ethereum-derived assets post-upgrade.— Pauljlei

Unresolved concerns

  • Disagreement between Chaos Labs and Gauntlet on appropriate wstETH and WETH borrow/supply cap sizes, with no consensus reached, leading to the proposal being postponed rather than resolved.— ChaosLabs, Pauljlei
  • Whether Arbitrum's on-chain liquidity can adequately support large liquidations of wstETH/WETH positions if caps are increased before the Shanghai Upgrade remains unresolved.— Pauljlei
  • The final decision on wstETH Optimism cap increase requested by MatthewGraham to support Lido DAO incentive efforts was deferred pending post-upgrade review, leaving that specific ask unresolved.— MatthewGraham, Pauljlei

Notable participants

  • ChaosLabsProposal author who presented cap increase recommendations and methodology, updated the proposal in response to community feedback, and ultimately paused the fast-track process due to lack of risk provider consensus.
  • MatthewGrahamCommunity member who requested an additional cap increase for wstETH on Optimism to support Lido DAO incentive efforts.
  • PauljleiPresented Gauntlet's competing risk analysis and more conservative cap recommendations, raising concerns about pre-Shanghai Upgrade risks that led to the proposal being postponed.
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model: claude-sonnet-5
provider: anthropic
profile: anthropic-strong-v1
prompt: v1.0
generated: 2mo ago
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