# \[ARFC\] - Chaos Labs Risk Stewards - Increase Supply and Borrow Caps on V3 Arbitrum - 11.09.2023 **URL:** \ **Category:** Governance\ **Created:** [November 10, 2023, 2:22am UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-v3-arbitrum-11-09-2023/15449 "2023-11-10T02:22:43Z")\ **Posts on this page:** 5\ **Page:** 1
**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:** [November 10, 2023, 2:22am UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-v3-arbitrum-11-09-2023/15449/1 "2023-11-10T02:22:43Z")
# Summary A proposal to increase: ### Arbitrum - wstETH - Supply Cap - rETH - Borrow Cap # 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 continuously monitor protocol usage and adjust our recommendations in response to evolving market conditions based on our simulations. ### Arbitrum **wstETH** The supply cap for wstETH on Arbitrum V3 is currently at 80% utilization. ![Untitled - 2023-11-09T211815.691](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/2/274b216a9fa72c396c31a9e9c9715325f68699e4.png) Utilizing our supply cap methodology, we found no added risk with raising the supply cap for wstETH on Arbitrum. Predominantly, wstETH collateral on Aave Arbitrum V3 is being used to borrow WETH, accounting for ~71% of the wstETH supplied. ![Untitled - 2023-11-09T211818.869](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/2/245e27bc19081bb054fab4871da3990fdbd963a7.png) Our methodology recommends capping the supply at 50% of the total circulating on-chain supply. With the circulating supply on Arbitrum at ~110K wstETH, we recommend increasing the supply cap to 55,000. **rETH** The borrow cap for rETH on Arbitrum V3 is currently at 81% utilization. ![Untitled - 2023-11-09T211941.753](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/b/b6b7732e988343839c64b1933069adf3476af0d5.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 1,360. Please note there are three accounts currently borrowing nearly 95% of all rETH, collateralized by wstETH and USDC: - [0xe831c8903de820137c13681e78a5780afddf7697](https://community.chaoslabs.xyz/aave/risk/wallets/0xe831c8903de820137c13681e78a5780afddf7697) - [0x139c238d822a7132557727be6d442d4476e797f0](https://community.chaoslabs.xyz/aave/risk/wallets/0x139c238d822a7132557727be6d442d4476e797f0) - [0xcc0ac052851e220f2f0591b75257329a667d76a3](https://community.chaoslabs.xyz/aave/risk/wallets/0xcc0ac052851e220f2f0591b75257329a667d76a3) While this is a relatively significant concentration, the usage and risk profile does not impact the recommendation. # Specification | Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap | | --- | --- | --- | --- | --- | --- | | Arbitrum | wstETH | 45,000 | 55,000 | 2,400 | No Change | | Arbitrum | rETH | 3,400 | No Change | 680 | 1,360 | # 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. ---
**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/gauntlet/32/4064_2.png) [@Gauntlet](https://governance.aave.com/u/Gauntlet)\ **Post date:** [November 10, 2023, 9:51pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-v3-arbitrum-11-09-2023/15449/2 "2023-11-10T21:51:50Z")
Gauntlet supports these cap increases on Arbitrum. ---
**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:** [November 11, 2023, 9:21pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-v3-arbitrum-11-09-2023/15449/3 "2023-11-11T21:21:38Z")
We’ve prepared the payload to be executed via the Risk Steward process for this proposal. > **[Safe{Wallet}](https://app.safe.global/transactions/tx?id=multisig_0x3Be327F22eB4BD8042e6944073b8826dCf357Aa2_0x9c2e5fbb88619f05bfc5e07160723c221b83c45d4acae395f1a1b0b01dd9e8f9&safe=arb1:0x3Be327F22eB4BD8042e6944073b8826dCf357Aa2)** > > Safe (prev. Gnosis Safe) is the most trusted platform to manage digital assets on Ethereum and multiple EVMs. Over $40B secured. ---
**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/gauntlet/32/4064_2.png) [@Gauntlet](https://governance.aave.com/u/Gauntlet)\ **Post date:** [November 13, 2023, 7:30pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-v3-arbitrum-11-09-2023/15449/4 "2023-11-13T19:30:29Z")
This was executed via risk steward. ---
**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\ **Post date:** [December 13, 2023, 7:30pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-v3-arbitrum-11-09-2023/15449/5 "2023-12-13T19:30:56Z")
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