# \[ARC\] - Chaos Labs Supply and Borrow Cap Updates - Aave V3 Polygon and Arbitrum - 2023.02.07

**URL:** <https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-polygon-and-arbitrum-2023-02-07/11605>\
**Category:** Risk\
**Created:** [February 7, 2023, 11:34pm UTC](https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-polygon-and-arbitrum-2023-02-07/11605 "2023-02-07T23:34:31Z")\
**Posts on this page:** 1\
**Showing post:** 2

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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:** [February 10, 2023, 4:01pm UTC](https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-polygon-and-arbitrum-2023-02-07/11605/2 "2023-02-10T16:01:09Z")

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Thanks, @ChaosLabs. Gauntlet’s analysis yielded different results (mostly higher caps). In order to reduce governance fatigue, we will not offer another set of options to the community. However, we did want to flag the BAL supply cap increase.

The recommended BAL supply cap of 569,200 above represents ~78% of circulating supply on Polygon [chain](https://polygonscan.com/token/0x9a71012b13ca4d3d0cdc72a177df3ef03b0e76a3). That represents a meaningful concentration risk for the Aave Polygon v3 market. Under [Gauntlet’s borrow and supply cap methodology](https://governance.aave.com/t/gauntlet-methodologies-borrow-and-supply-cap/11487), even our [Aggressive](https://governance.aave.com/t/gauntlet-methodologies-borrow-and-supply-cap/11487#:~:text=Our%20aggressive%20recommendation%20(%26%20ETH%20mainnet)%20framework%20is%20summarized%20below.) recommendation would set the max amount of BAL at 361k. If Chaos moves forward with recommending an increase to BAL’s supply cap, we recommend no cap larger than 361k.

We’d note that there are several assets on this list that Gauntlet would recommend increasing caps for, but _only if the community agrees on an Aggressive assumption_. The community has not yet decided on a Conservative vs. Aggressive strategy, so we ask that the community provides input on [this thread](https://governance.aave.com/t/arc-gauntlet-borrow-supply-cap-updates-for-aave-v3-op-and-aave-v3-avax-2023-01-27/11488).

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_[View the full topic](https://governance.aave.com/t/arc-chaos-labs-supply-and-borrow-cap-updates-aave-v3-polygon-and-arbitrum-2023-02-07/11605)._