Summary
A proposal to:
- Increase the weETH supply and borrow cap on Aave V3’s Arbitrum deployment.
weETH
Motivation
weETH has reached its supply cap and 89% of borrow cap on Arbitrum.
Supply Distribution
Most of the top suppliers are borrowing WETH against weETH collateral, putting these positions at limited risk of liquidations, given the calculated oracle for weETH.
Overall, WETH represents 100% of the value borrowed against weETH.
Recommendation
Given the analysis above and onchain liquidity, we recommend doubling the supply and borrow cap.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Arbitrum | weETH | 1,000 | 2,000 | 100 | 200 |
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