# \[ARFC\] - Chaos Labs Risk Stewards - Increase Supply and Borrow Caps on Aave V3 - 10.29.2023

**URL:** <https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-aave-v3-10-29-2023/15261>\
**Category:** Governance\
**Created:** [October 29, 2023, 3:52pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-aave-v3-10-29-2023/15261 "2023-10-29T15:52:26Z")\
**Posts on this page:** 1\
**Showing post:** 1

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**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:** [October 29, 2023, 3:52pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-aave-v3-10-29-2023/15261/1 "2023-10-29T15:52:26Z")

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# Summary

A proposal to increase:

- Ethereum

- Arbitrum:

- Avalanche:

- Metis

# Motivation

The recommendations below were made utilizing Chaos’ supply and borrow cap methodologies and after analyzing user positions for each asset.

Please note that there are several other assets across V3 deployments with high supply and borrow cap utilization that were analyzed and do not have recommendations for an increase, given current market conditions. We maintain continuous monitoring of protocol usage and adjust our recommendations in response to evolving market conditions based on our simulations.

### Ethereum

**MKR**

The supply cap for MKR on Ethereum V3 is currently at 97% utilization.

 ![Untitled - 2023-10-29T110552.431](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/3/3c02dee1a681c6904607712071ea9ac180733c3d.png)

Utilizing our supply and borrow cap methodology, we do not observe any additional risk when increasing the supply cap for MKR on Ethereum. We recommend doubling the supply cap to 30K MKR.

In addition, the MKR debt ceiling is also near 100% utilization. We will follow up with a separate recommendation on its increase following additional analysis.

**RPL**

The borrow cap for RPL on Ethereum V3 is currently at 81% utilization.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/4/4aa2bed11a8bc3275ef3d4966f9929705c277d69.png)

Utilizing our supply and borrow cap methodology, we do not observe any additional risk when increasing the borrow cap for RPL on Ethereum. We recommend doubling the borrow cap to 480K RPL.

### Arbitrum

**rETH**

The borrow cap for rETH on Arbitrum V3 is currently at 98% utilization.

 ![Untitled - 2023-10-29T110557.330](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/8/89482746147e4aaa9d866eaa4e1c09b9a7fe7b80.png)

Utilizing our borrow cap methodology, we do not observe any additional risk when increasing the borrow cap for rETH on Arbitrum. We recommend doubling the borrow cap to 680.

### Avalanche

**WAVAX**

The supply cap for WAVAX on Avalanche V3 is currently at 91% utilization, and the borrow cap is at 84% utilization.

 ![Untitled - 2023-10-29T110559.189](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/8/83b85c00d4f241eb425ae7f8d32bb63b4c56f351.png)

Utilizing our supply and borrow cap methodology, we do not observe any additional risk when increasing the supply cap and borrow cap for WAVAX on Avalanche. We recommend increasing the current supply cap to 5.7M WAVAX and the borrow cap to 3.6M.

### Metis

**METIS**

The borrow cap for METIS on Metis V3 is currently at 93% utilization.

 ![Untitled - 2023-10-29T110601.232](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/5/57fcae194fe696f26ad1aaf80cc045f112bb2b77.png)

Utilizing our borrow cap methodology, we do not observe any additional risk when increasing the borrow cap for METIS. We recommend doubling the borrow cap to 32K.

# Specification

| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
| --- | --- | --- | --- | --- | --- |
| Ethereum | MKR | 15,000 | 22,500 | 3,000 | No Change |
| Ethereum | RPL | 840,000 | No Change | 240,000 | 480,000 |
| Arbitrum | rETH | 3,400 | No Change | 340 | 680 |
| Avalanche | WAVAX | 3,800,000 | 5,700,000 | 2,400,000 | 3,600,000 |
| Metis | METIS | 360,000 | No Change | 16,000 | 32,000 |

# Next Steps

Once we receive feedback from [@Gauntlet](https://governance.aave.com/u/gauntlet) on the above recommendations, we will move forward to implement these updates via the Risk Steward process.

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_[View the full topic](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-aave-v3-10-29-2023/15261)._