# \[ARC\] - Chaos Labs Supply and Borrow Cap Updates - Aave V3 - 2023.02.24

**URL:** https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-2023-02-24/12048
**Category:** Risk
**Created:** [February 24, 2023, 5:41pm UTC](https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-2023-02-24/12048 "2023-02-24T17:41:43Z")
**Posts on this page:** 1
**Showing post:** 5

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### Author: ![Pauljlei](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/pauljlei/32/3488_2.png) [@Pauljlei](https://governance.aave.com/u/Pauljlei)
#### Post date: [March 1, 2023, 1:39am UTC](https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-2023-02-24/12048/5 "2023-03-01T01:39:37Z")

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It is nice to see Chaos updating their methodology to incorporate elements that have been included in [Gauntlet’s borrow/supply cap methodology](https://governance.aave.com/t/gauntlet-methodologies-borrow-and-supply-cap/11487), such as 50% of circulating supply.

> [@ChaosLabs](#):
>
> 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.

> [@Gauntlet Methodologies - Borrow and Supply Cap](https://governance.aave.com/t/gauntlet-methodologies-borrow-and-supply-cap/11487/1):
>
> Non-stablecoin: Take the **`minimum value`** of
> 
> - Minimum supplied tokens needed to break even in a long attack
> - 10 \* 2% aggregate liquidity across all centralized and decentralized sources
> - 50% \* average daily volume across all centralized and decentralized sources
> - 50% of the circulating token supply on-chain

As mentioned above, Gauntlet has been working on updated borrow/supply cap recommendations. We posted them [here](https://governance.aave.com/t/arc-gauntlet-borrow-supply-cap-updates-for-aave-v3-op-and-aave-v3-avax-2023-01-27/11488/14).

Given that Chaos’s methodology now incorporates a cap of 50% of circulating supply, several of Chaos recs are similar to Gauntlet’s. However, there are important areas where our recommendations diverge (WBTC, AVAX, etc.).

As we [mentioned](https://governance.aave.com/t/arc-gauntlet-borrow-supply-cap-updates-for-aave-v3-op-and-aave-v3-avax-2023-01-27/11488/6#:~:text=Whatever%20option%20the%20community%20decides%20on%2C%20Gauntlet%20and%20Chaos%20can%20then%20follow%20up%20with%20specific%20recommendations%20incorporating%20that%20assumption.%20We%20are%20happy%20to%20collaborate%20with%20Chaos%20here), we are happy to collaborate with Chaos on this set of recommendations. We wish to incorporate our option so that the community may choose transparently. We can provide a summary of the key differences so that the community can have the clarity to make an informed decision.

As such, instead of going direct to AIP, it may be best to first do a Snapshot vote (swiftly, of course) to decide between the two options and then fast-follow with an AIP. We are also open to hearing other alternatives from Chaos or the community.

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_[View the full topic](https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-2023-02-24/12048)._