# \[ARFC\] Chaos Labs Risk Stewards - Increase Supply and Borrow Caps for weETH on V3 Arbitrum - 04.21.2024

**URL:** <https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-for-weeth-on-v3-arbitrum-04-21-2024/17433>\
**Category:** Governance\
**Created:** [April 21, 2024, 12:49pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-for-weeth-on-v3-arbitrum-04-21-2024/17433 "2024-04-21T12:49:33Z")\
**Posts on this page:** 3\
**Page:** 1

<div class="post-metadata">

**Author:** ![ChaosLabs](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/chaoslabs/32/6850_2.png) [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)\
**Post date:** [April 21, 2024, 12:49pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-for-weeth-on-v3-arbitrum-04-21-2024/17433/1 "2024-04-21T12:49:33Z")

</div>

## 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.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/1/1ce67274258b383acf83b30fa33b76a26a0cd0d9.png)

Overall, WETH represents 100% of the value borrowed against weETH.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/5/5518cf1e9dce41c11af04f3416700d7be1d2cbe5.png)

### 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](https://creativecommons.org/publicdomain)

---

<div class="post-metadata">

**Author:** ![ChaosLabs](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/chaoslabs/32/6850_2.png) [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)\
**Post date:** [April 22, 2024, 3:50am UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-for-weeth-on-v3-arbitrum-04-21-2024/17433/2 "2024-04-22T03:50:52Z")

</div>

The transaction for this proposal has now been executed.

---

<div class="post-metadata">

**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\
**Post date:** [May 22, 2024, 3:51am UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-for-weeth-on-v3-arbitrum-04-21-2024/17433/3 "2024-05-22T03:51:45Z")

</div>

This topic was automatically closed 30 days after the last reply. New replies are no longer allowed.