Following the community vote on risk preferences regarding caps on Aave V3, we have updated our supply and borrow cap methodology to add a Supply Cap upper bound of 50% of the total circulating supply for all assets. This is done to protect from the concentration of on-chain liquidity on Aave.
To reduce governance overhead and not create additional proposals, we would like to add the following supply and borrow caps updates to this proposal.
Accepting these changes will lead to freezing supply for the following assets:
- BTC.b, WBTC.e (V3 Avalanche)
- AAVE , WBTC (V3 Optimism)
- AAVE (V3 Arbitrum)
| Network | Asset | Current Supply | Current Supply Cap | Total Circulating Supply | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|---|---|
| Avalanche | BTC.b | 3,950 | 5,800 | 6,984 | 3,500 | 3,190 | 1,900 |
| Avalanche | WBTC.e | 1,340 | 5,233 | 2,770 | 1,400 | No Cap | 770 |
| Avalanche | WETH | 22,960 | 113,000 | 75,570 | 37,500 | 62,150 | 20,500 |
| Optimism | AAVE | 61,890 | 100,000 | 66,150 | 33,000 | N/A | N/A |
| Optimism | LINK | 93,050 | 258,000 | 317,900 | 159,000 | 141,900 | 87,500 |
| Optimism | WBTC | 636 | 1,100 | 1,273 | 650 | 605 | 360 |
| Arbitrum | AAVE | 1,910 | 2,500 | 3,660 | 1,850 | N/A | N/A |
Next Steps
As this proposal will effectively freeze supply on several assets, we invite community feedback before posting an AIP. We are targeting an AIP in 48 hours, barring community objection.