[ARFC] Chaos Labs Risk Stewards - Increase Supply and Borrow Cap for weETH on V3 Arbitrum - 05.02.2024

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

1 Like

The transaction for this proposal has now been executed.