Supply and Borrow Cap Updates Aave V3
01Summary
Proposal to increase supply and borrow caps for Aave V3 assets across multiple chains that have reached high utilization. Increases include: Ethereum wstETH borrow cap (6k to 12k), Arbitrum WBTC supply cap (2.1k to 4.2k) and WETH supply/borrow caps (35.28k to 70k / 11.17k to 20k), Optimism wstETH supply cap (6k to 12k) and WBTC supply cap (620 to 1.2k), Polygon LINK supply cap (297.64k to 370k) and WBTC supply cap (1.55k to 3.1k).
- Type
- parameter change
Key changes
- Ethereum wstETH borrow cap increased from 6,000 to 12,000(medium)
- Arbitrum WBTC supply cap increased from 2,100 to 4,200(medium)
- Arbitrum WETH supply cap increased from 35,280 to 70,000(high)
- Arbitrum WETH borrow cap increased from 11,170 to 20,000(high)
- Optimism wstETH supply cap increased from 6,000 to 12,000(medium)
- Optimism WBTC supply cap increased from 620 to 1,200(medium)
- Polygon LINK supply cap increased from 297,640 to 370,000(medium)
- Polygon WBTC supply cap increased from 1,550 to 3,100(medium)
Notable concerns
- Cap increases should be monitored to ensure they align with market conditions and risk assessments
Generated by Kvorum
02Description
Simple Summary
A proposal to increase supply and borrow caps for the following caps on Aave V3:
- Ethereum - wstETH
- Arbitrum - WBTC, WETH
- Optimism - WBTC, wstETH
- Polygon - LINK, WBTC
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 objective of this proposal is to recommend updated supply and borrow caps for V3 assets that have recently reached over 75% utilization of either cap, and our methodologies allow for an increase of the caps.
The recommendations provided in this proposal were derived using Chaos Labs’ Supply and Borrow Cap Methodology.
The respective governance forum discussion is linked below:
Specification
The following risk parameter proposal is presented below:
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum | wstETH | 200,000 | No Change | 6,000 | 12,000 |
| Arbitrum | WBTC | 2,100 | 4,200 | 1,115 | No Change |
| Arbitrum | WETH | 35,280 | 70,000 | 11,170 | 20,000 |
| Optimism | wstETH | 6,000 | 12,000 | 940 | No Change |
| Optimism | WBTC | 620 | 1200 | 250 | No Change |
| Polygon | LINK | 297,640 | 370,000 | 163,700 | No Change |
| Polygon | WBTC | 1,550 | 3,100 | 851 | No Change |
References
Tests: Ethereum, Polygon , Optimism, Arbitrum
Proposal payload implementation: Ethereum, Polygon , Optimism, Arbitrum
Copyright
Copyright and related rights waived via CC0.
03Mismatch analysis
The proposal follows Aave's standard cross-chain governance pattern: the top-level Ethereum-based proposal contains one 'execute(address)' or bridge call per target network, each pointing to a dedicated payload contract (linked in the description via GitHub source and test files for Ethereum, Arbitrum, Optimism, and Polygon) that performs the actual ConfiguratorPoolConfigurator.setSupplyCap/setBorrowCap calls described in the specification table. The decoded calldata shows exactly four actions, matching the four chains named in the Simple Summary and Specification table. Three actions use execute(address) with a payload address argument (consistent with Ethereum, Arbitrum, and Optimism cross-chain executors), and the fourth uses a fallback()-style call without an explicit address, which is consistent with Polygon's distinct bridge relay mechanism (e.g., FxPortal) where the payload address is encoded in the message payload rather than as a direct calldata argument — this is a known, non-suspicious structural difference for Aave's Polygon governance bridge, not evidence of a different action count or target. Since the decoded calldata only exposes the top-level dispatch calls and not the internal cap values set by each payload contract, I cannot directly verify the exact numeric cap changes (e.g., wstETH borrow cap 6,000→12,000) against on-chain state from this data alone. However, the structure (4 chains, 4 dispatch actions, addresses matching known Aave governance executor patterns) is fully consistent with the description, and there is no indication of missing, extra, or misdirected actions. Confidence is medium rather than high due to the inability to directly confirm the granular cap numbers from the decoded top-level calldata alone.
Generated by Kvorum
04Actions
- Target
- 0x158a…d45b
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0xac9AE3591c784275f452b5B9f7121a9122dc8Bfe" }- Calldata
- Target
- 0x5f5c…6711
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0x050997fC08733EB8593c04102706d8D2e7A9443E" }- Calldata
- Target
- 0xd1b3…cfa3
- Value
- 0 wei
- Function
- execute(address)
- Arguments
{ "0": "0xc53586AA2626094bD33C123794E34417ea877a36" }- Calldata
- Target
- 0x8070…65c1
- Value
- 0 wei
- Function
- fallback()
- Arguments
{}- Calldata
05Tally
Summed from votes
06Voters
| Voter | Choice | % of total | Rationale | ||
|---|---|---|---|---|---|
| 320x329c…3ed4 | For | 229.9K | 0.00% | — | 4y ago |
| B80xb83b…cf5c | For | 81K | 0.00% | — | 4y ago |
| 160x1664…36d9 | For | 16.9K | 0.00% | — | 4y ago |
| 180x1855…98ba | For | 3K | 0.00% | — | 4y ago |
| EA0xea17…6676 | For | 38.5 | 0.00% | — | 4y ago |
| E40xe459…e666 | For | 0.5 | 0.00% | — | 4y ago |
07Forum
- [ARFC] Chaos Labs Supply and Borrow Cap Updates - 04.21.2023 ↗discourse · high confidence
Arguments for
- Assets have reached over 75% utilization of either cap, and Chaos Labs' methodology allows for recommended increases to reduce governance overhead.— ChaosLabs
- Increased caps will facilitate migration of additional V2 positions, particularly for WBTC on Polygon.— ChaosLabs
- Supply cap increases account for expected future changes like the planned ETH-correlated E-Mode on Optimism.— ChaosLabs
Arguments against
None surfaced.
Unresolved concerns
- Why was the Optimism wstETH supply cap increased to 12,000 while Arbitrum was kept at 4,650 (or 4,200), and what explains this disparity?— gohawi8287
- Proposal was cancelled on May 8th after receiving overwhelming support (330,846 YAEs to 0 NAEs); reason for cancellation was unclear initially.— holden
- Discrepancy in actual Arbitrum WETH supply cap execution: proposal specified 70,000 but only 45,000 appears to have been implemented.— pcx
Notable participants
- ChaosLabsProposer who developed the supply and borrow cap methodology and recommendations for all assets.
- PauljleiGauntlet representative who flagged prior commitment to a different WETH supply cap increase (35,280 to 45,000).
- holdenCommunity member who raised concern about proposal cancellation after initial approval.
- gohawi8287Community member who questioned disparity in wstETH cap recommendations between chains.
- MonethCommunity member who asked for clarification on execution status across Layer 2 chains.
- sakulstraCore contributor who provided technical details on chain executors and execution delays.
- pcxCommunity member who identified potential discrepancy in actual WETH cap implementation on Arbitrum.
Generated by Kvorum
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