# \[ARC\] - 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:** 6

<div class="post-metadata">

**Author:** ![ChaosLabs](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/chaoslabs/32/6850_2.png) [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)\
**Post date:** [March 1, 2023, 5:28am UTC](https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-2023-02-24/12048/6 "2023-03-01T05:28:11Z")

</div>

To reduce governance overhead and not delay the implementation of the changes (including the update for Arbitrum and Polygon) any further, we propose the following:

# Optimism

As both proposals are very similar, we suggest going straight to AIP with a joint proposal, updating Chaos’ original recommendations while incorporating Gauntlet’s recommendations for LINK, WBTC, and AAVE.

- LINK

- WBTC

- AAVE - both proposals effectively freeze supply.

We will continue monitoring these markets and propose updated supply caps with changing market conditions.

## Recommendations:

| Asset | Current Supply | Current Supply Cap | Recommended Supply Cap | Current Borrow | Current Borrow Cap | Recommended Borrow Cap |
| --- | --- | --- | --- | --- | --- | --- |
| DAI | 2,620,000 | 2,000,000,000 | 25,000,000 | 1,210,000 | N/A | 16,000,000 |
| sUSD | 1,510,000 | 20,000,000 | No Change | 783,150 | N/A | 13,000,000 |
| USDC | 48,510,000 | 2,000,000,000 | 150,000,000 | 15,870,000 | N/A | 100,000,000 |
| USDT | 3,880,000 | 2,000,000,000 | 25,000,000 | 3,100,000 | N/A | 16,000,000 |
| AAVE | 61,890 | 100,000 | 45,000 | N/A | N/A | N/A |
| LINK | 93,050 | 258,000 | 160,000 | 10,661 | 141,900 | 84,000 |
| WBTC | 636 | 1,100 | 620 | 21 | 605 | 250 |

# Avalanche

A deciding Snapshot vote with two options for the community to vote on.

- Both options will have the same recommendations for stables (DAI, FRAX, MAI, USDC, and USDT), AAVE, and LINK - as proposed in the original post.

- WETH - As the supply cap is almost identical, we recommend incorporating Chaos Labs’ borrow cap recommendation as it is more conservative while still allowing room for significant borrowing (~17% utilization).

- WAVAX - incorporate Gauntlets’ recommendations.

- Let the community decide between the following options for BTC.b and WBTC.e:

- **It is important to note that for BTC.b, both proposals effectively freeze new supply.**

## Recommendations :

| Asset | Current Supply | Current Supply Cap | Recommended Supply Cap | Current Borrow | Current Borrow Cap | Recommended Borrow Cap |
| --- | --- | --- | --- | --- | --- | --- |
| DAI | 12,260,000 | 2,000,000,000 | 30,000,000 | 6,480,000 | N/A | 20,000,000 |
| FRAX | 16,260 | 50,000,000 | 1,500,000 | 15,281 | 2,000,000 | 1,000,000 |
| MAI | 113,620 | 50,000,000 | 700,000 | 103,660 | 2,000,000 | 460,000 |
| USDC | 156,940,000 | 4,000,000,000 | 250,000,000 | 97,960,000 | N/A | 175,000,000 |
| USDT | 52,450,000 | 2,000,000,000 | 200,000,000 | 35,930,000 | N/A | 140,000,000 |
| AAVE | 3,860 | 4,500 | 5,800 | N/A | N/A | N/A |
| LINK | 294,870 | 353,000 | 440,000 | 5,750 | 220,000 | No Change |
| WETH | 22,960 | 113,000 | 38,000 | 3,438 | 62,150 | 20,500 |
| WAVAX | 2,890,000 | 13,100,000 | 3,800,000 | 1,040,000 | No Cap | 1,200,000 |

### Option 1 - Aggressive

| Asset | Current Supply | Current Supply Cap | Recommended Supply Cap | Current Borrow | Current Borrow Cap | Recommended Borrow Cap | Notes |
| --- | --- | --- | --- | --- | --- | --- | --- |
| BTC.b | 3,950 | 5,800 | 3,500 | 364 | 3,190 | 1,900 | freezes supply |
| WBTC.e | 1,340 | 5,233 | 2,000 | 223 | No Cap | 1,100 | |

### Option 2- Conservative

| Asset | Current Supply | Current Supply Cap | Recommended Supply Cap | Current Borrow | Current Borrow Cap | Recommended Borrow Cap | Notes |
| --- | --- | --- | --- | --- | --- | --- | --- |
| BTC.b | 3,950 | 5,800 | 3,000 | 364 | 3,190 | 900 | freezes supply |
| WBTC.e | 1,340 | 5,233 | 1,400 | 223 | No Cap | 770 | |

---

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