Simple Summary
A proposal to adjust five (11) total risk parameters, including Supply Cap and Borrow Cap, across seven (7) Aave V3 Polygon and Arbitrum assets.
Motivation
The objective of this proposal is to recommend updated supply and borrow caps for V3 assets that have reached over 85% utilization of either cap. The recommendations provided in this proposal were derived using Chaos Labs’ Updated Supply and Borrow Cap Methodology.
Below are the data and considerations for the assets and recommended caps:
Polygon
DAI, USDC, USDT
We propose updating the borrow caps for DAI, USDC, and USDT. The new proposed caps are set to allow growth on V3 and room for the migration of positions from V2. The image below shows the total value in borrows for the said assets
BAL
Given the calculation below, we recommend increasing the supply cap of BAL to 569,200, doubling the current supply. As the borrow cap is to be updated in this AIP, we do not recommend a change.
Arbitrum
WETH
Given the calculation below, we recommend increasing the supply cap of WETH to 35,280, doubling the current supply. As the current borrow cap is at <33% utilization, we do not recommend updating it.
LINK
Given the calculation below, we recommend increasing the supply cap of LINK to 676,980, doubling the current supply. As the current borrow cap is at <10% utilization, we do not recommend updating it.
Recommendations
Polygon
| Current Supply | Current Supply Cap | Recommended Supply Cap | Current Borrow | Current Borrow Cap | Recommended Borrow Cap | notes | |
|---|---|---|---|---|---|---|---|
| BAL | 284,600 | 284,600 | 361,000 | 136,400 | 256,140 | NO CHANGE | supply cap was modified from our original analysis to address Gauntlet’s recommendation) |
| EURS | 2,060,000 | 2,000,000,000 | 4,000,000 | 728,530 | 728,530 | 947,000 | Recommendation provided by Gauntlet |
| DAI | 5,680,000 | 2,000,000,000 | 45,000,000 | 3,160,000 | 3,860,000 | 30,000,000 | |
| USDC | 35,590,000 | 2,000,000,000 | 150,000,000 | 18,600,000 | 30,680,000 | 100,000,000 | |
| USDT | 5,940,000 | 2,000,000,000 | 45,000,000 | 4,870,000 | 5,060,000 | 30,000,000 |
Arbitrum
| Current Supply | Current Supply Cap | Recommended Supply Cap | Current Borrow | Current Borrow Cap | Recommended Borrow Cap | |
|---|---|---|---|---|---|---|
| LINK | 338,490 | 350,000 | 677,000 | $763,400 | 20,427 | NO CHANGE |
| ETH | 17,640 | 20,300 | 35,280 | 3,663 | 11,165 | NO CHANGE |
Next Steps
We invite a community discussion around the proposed parameter updates and will follow up with a Snapshot vote in 5 days, barring community objection.