[ARFC] Aave V3 Caps increase - 2023.08.31

title: [ARFC] Aave V3 Caps increase - 2023.08.31
author: Alice Rozengarden @Alice - Aave-chan initiative
date: 2023-08-31


This proposal is asking for feedback from the risk providers on various assets across multiple networks that are nearing the full use of either their supply or borrow caps.

This Proposal is compatible with the Direct-to-AIP Framework


Several caps on assets across the various V3 markets are reaching critical levels but haven’t been included in the recent proposal by ChaosLabs. Thus, the goal of this proposal is to ask about their status and the risk associated with the potential increase of their caps. Letting those caps reach 100% while it could have been avoided would result in a sub-optimal experience for the user of AAVE and of the product built around the protocol as well as a loss of potential revenue.


The following assets are concerned by the proposal

Supply Caps:

Chain Token Supply cap Utilization rate Proposed Supply cap Increase (%) Total supply % of the total supply
Arbitrum AAVE 1.85k 100% 2710 46% 5.4k ~50%
Metis Metis 60k 76% 120k 100% 2.96M 4%
Polygon DPI 1.417 87% 2460 ~73% 4928 ~50%


This proposal is powered by Skyward.

The author hasn’t received any compensation from any third party for this proposal.

Next step:

  1. Get feedback from both risk providers
  2. If they reach a consensus on some assets ask them to use risk steward.
  3. Should only one of them agree on the raise of a caps for some assets, escalate the concerned assets to an AIP as they would fit the criteria for the Direct-to-AIP Framework.


Copyright and related rights waived via CC0.


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

1 Like

Thanks @Alice - Gauntlet has previously proposed recommendations to increase caps for AAVE, LINK on Arbitrum, and DPI on Polygon. If the community has an aggressive outlook on AAVE and DPI, we can support

  • Increasing supply cap for AAVE on Arbitrum Aave v3 to 2710 (vs 3700 proposed).
  • Increasing supply cap for DPI on Polygon Aave v3 to 2460 (vs 2800 proposed).

Gauntlet also supports raising Metis supply cap to 120k.

At this time, we do not recommend increasing supply cap for WAVAX or SAVAX due to liquidity constraints.

The main topic as been updated to the parameters supported by @Gauntlet should the community support an aggressive approach.

I would like to thanks the risk providers for their feedbacks.


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