[ARFC] Aave V3 Caps increase - 2023.08.31

Thanks for putting forward this proposal @Alice.

Chaos constantly monitors supply and borrow cap utilization via our platforms and public alerts, which users can subscribe to here.

Our recommendations consider the observed demand for supply and borrow, such that there is sufficient room for growth, utilizing our supply and borrow cap methodologies while taking into acount asset use cases, user behavior, and market and liquidity conditions.

In regard to the specific assets in the post:

  • LINK (Arbitrum) - has reached 91% supply utilization following an increase of nearly 95K LINK over the past 24 hours. We support increasing the cap to 50% of the total circulating supply on Arbitrum which is 1.3M LINK, and will update our current recommendations accordingly to incorporate this recommendation.

  • sAVAX, WAVAX (Avalanche), and METIS (Metis) - we believe the current available room for supply and borrow is sufficient to enable growth in demand and prefer to increase these caps via risk steward after witnessing this additional demand.

  • AAVE (Arbitrum), DPI (Polygon) - Given current sparse on-chain liquidity, we do not recommend increasing these supply caps

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