Summary
LlamaRisk recommends a fifth round of Add and Draw Cap increases for Aave V4, focused on the Core Hub, bringing the total supply cap ceiling to approximately $208M. Following the execution of Round 4 cap increases, both frxUSD and USDG on Core/Main have filled to 100% Add Cap utilization under the live incentive program. This round delivers a second tranche on those two assets, doubling each from 10M to 20M, and applies $2–3M USD-equivalent bumps to the remaining high-utilization reserves on Core. Credit lines are unchanged this round.
The proposed adjustments add approximately $29M in additional supply cap capacity, all on the Core Hub. The bulk is the frxUSD/USDG step-up to 20M each; the remainder funds high-utilization Main collateral (cbBTC), the LINK reserve approaching the 80% threshold, and the smaller dedicated Forex and Gold spokes that have pressed against their caps. Round 4 caps still have headroom on Prime, and Plus remains in early bootstrap.
Rationale
This round responds to two distinct utilization signals from the post-Round-4 data.
1. The frxUSD and USDG incentive programs filled their Round 4 caps. Both reserves are at 100% Add Cap utilization on Core/Main following the incentive rollout. To extend reward capacity through the next cycle without halting deposits, the Core/Main caps for both assets are raised in a single tranche to 20,000,000 each.
2. Other Core/Main and small-spoke reserves have approached their Round 4 caps. cbBTC on Core/Main sits at ~90% Add Cap utilization, the Core/Forex USDC and USDT pools are near 100%, and the Core/Gold XAUt pool is above 80%. These receive USD-equivalent bumps in the $1–3M range, sized to relieve the immediate constraint while staying conservative against observed DEX liquidity. LINK on Core/Main at 78% utilization receives a preemptive bump to avoid hitting the cap before the next monitoring cycle.
Changes Since Round 4 (May 19 → May 26, 2026)
Following the execution of Round 4 caps, deposits have continued to absorb. Total deposits grew from $63,382,699 to $89,635,315 (+41%).
Source: LlamaRisk, May 26, 2026
The most notable inflows include USDG on the Core Main Spoke (+$7,998,710), frxUSD on the Core Main Spoke (+$5,500,339), WETH on the Core Main Spoke (+$4,404,531), cbBTC on the Core Main Spoke (+$1,957,647), weETH on the Core Etherfi Spoke (+$1,656,684).
Cap Utilization
The Core Hub now holds $76,610,109 in deposits (55% of Add Cap). The Prime Hub holds $12,771,955 (38% of Add Cap), while the Plus Hub remains at $253,250 (3%).
Source: LlamaRisk, May 26, 2026
6 reserves across the protocol have exceeded 80% Add Cap utilization:
- USDG (Core Hub, Main): 100% Add Cap filled (10,000,107/10,000,000, $10,000,107)
- frxUSD (Core Hub, Main): 100% Add Cap filled (10,000,039/10,000,000, $9,998,762)
- USDC (Core Hub, Forex): 99% Add Cap filled (396,559/400,000, $396,417)
- USDT (Core Hub, Forex): 92% Add Cap filled (368,212/400,000, $367,597)
- cbBTC (Core Hub, Main): 89% Add Cap filled (45/50, $3,392,304)
- XAUt (Core Hub, Gold): 83% Add Cap filled (208/250, $935,832)
Source: LlamaRisk, May 26, 2026
A further 5 reserves sit in the 50–80% range:
- LINK (Core Hub, Main): 78% filled
- USDC (Core Hub, Main): 62% filled
- WBTC (Core Hub, Main): 62% filled
- wstETH (Prime Hub, Bluechip): 56% filled
- USDC (Prime Hub, Bluechip): 52% filled
These are on trajectory to fill and the most pressing of them (LINK on Core/Main at 78%) benefits from a preemptive increase this round.
Recommendations
We target approximately $29M in additional supply cap capacity, all on the Core Hub. frxUSD and USDG on Core/Main are doubled in a single tranche to 20M each to support the ongoing incentive program. Other tight-cap reserves receive $1–3M USD-equivalent bumps sized to their pool scale: cbBTC on Core/Main (+~$2.65M), LINK on Core/Main (+~$2M preemptive), the Forex USDC, USDT and EURC pools (~3.75x each), and Gold XAUt (+~$1.1M).
Source: LlamaRisk, May 26, 2026
Core Hub
| Spoke | Asset | Current Add Cap | Proposed Add Cap | Current Draw Cap | Proposed Draw Cap |
|---|---|---|---|---|---|
| Forex | EURC | 300,000 | 1,125,000 | 312,500 | 1,170,000 |
| Forex | USDC | 400,000 | 1,500,000 | 135,000 | 500,000 |
| Forex | USDT | 400,000 | 1,500,000 | 135,000 | 500,000 |
| Gold | USDC | 0 | - | 125,000 | 250,000 |
| Gold | USDG | 0 | - | 62,500 | 250,000 |
| Gold | USDT | 0 | - | 200,000 | 400,000 |
| Gold | XAUt | 250 | 500 | 0 | - |
| Gold | frxUSD | 0 | - | 100,000 | 250,000 |
| Main | LINK | 220,000 | 430,000 | 0 | - |
| Main | USDG | 10,000,000 | 20,000,000 | 6,800,000 | 13,600,000 |
| Main | cbBTC | 50 | 85 | 3 | 5 |
| Main | frxUSD | 10,000,000 | 20,000,000 | 6,800,000 | 13,600,000 |
Next Steps
Following review and confirmation, the recommended cap adjustments will be applied directly using the Aave Security Council. We will continue to monitor cap utilization across all hubs, and provide further adjustment recommendations as market conditions evolve.
Disclaimer
This review was independently prepared by LlamaRisk, a community risk service provider for the Aave DAO. LlamaRisk did not receive compensation from the protocol(s) or their affiliated entities for this work. The information provided should not be construed as legal, financial, tax, or professional advice.