Summary
A proposal to increase the weETH supply and borrow cap on Aave V3’s Arbitrum deployment.
Motivation
weETH (Arbitrum)
weETH on Arbitrum has reached its supply cap with 96% borrow utilization.
Supply Distribution
Nearly all borrows against weETH are in E-mode, with the top suppliers are borrowing WETH against their collateral, putting these positions at little risk of liquidation.
Borrow Distribution
Borrows are limited, with the largest user holding a delta-neutral position, again at little risk of liquidation.
Recommendation
Based on on-chain liquidity and user distribution, we recommend doubling the supply and borrow caps.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Arbitrum | weETH | 4,000 | 8,000 | 400 | 800 |
Next Steps
We will move forward and implement these updates via the Risk Steward process.
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this ARFC.
Copyright
Copyright and related rights waived via CC0