# \[ARFC\] Chaos Labs Risk Stewards - Increase Supply Caps on Aave V3 - 12.05.24 **URL:** \ **Category:** Governance\ **Created:** [December 5, 2024, 1:44pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-12-05-24/20076 "2024-12-05T13:44:04Z")\ **Posts on this page:** 4\ **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:** [December 5, 2024, 1:44pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-12-05-24/20076/1 "2024-12-05T13:44:04Z")
# **Summary** A proposal to: - Increase sUSDe’s supply cap on Aave V3’s Ethereum - Main instance ## sUSDe (Ethereum-Main) sUSDe has reached 100% supply cap utilization on the Ethereum Main instance. ![image - 2024-12-05T154309.606](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/5/53acf797ea1e54b5838968d0ecdb3ab65611e483.png) ![image - 2024-12-05T154311.932](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/d/d95314034cc27dd2890bbc627b6b00956ee3e878.png) ### Supply Distribution The supply of sUSDe on Ethereum is well distributed, with the largest supplier accounting for 22% of the total supply. The majority of the top positions borrow a varied list of stablecoins such as USDC, USDS, and USDT. This is likely in order to mitigate interest rate spikes of a single stablecoin asset. All of the positions maintain a safe health score given the high correlation between the borrow and collateral assets. None of the top positions pose a liquidation risk. ![image - 2024-12-05T154315.416](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/5/5b8f09d8704275a899d44da8cb9f305955850234.png) Overall, the assets borrowed against sUSDe show a similar distribution to the top positions, with USDC and USDS representing 37% and 22% of the borrowed value, respectively, and USDT representing 22%. GHO represents a smaller share of 1.6%. This low GHO usage is likely caused by the Ethereum facilitator cap being reached. ![image - 2024-12-05T154317.930](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/2/2f10764a37edd1297b23e96d710fcb12a8146d1f.png) ### Liquidity DEX liquidity between sUSDe and USDC on Ethereum kept increasing over the month of November, stabilizing around $25M, supporting an increase in supply cap. ![image - 2024-12-05T154320.562](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/6/64385295d3556723baf1a77e640bc9f8fca52451.png) ### Recommendation Given user behavior and on-chain liquidity, we recommend increasing the supply cap to 750,000,000 sUSDe. This increase is backed by [Chaos Labs’ risk simulations](https://cdn.sanity.io/files/zmh9mnff/production/130e1060165f7ab0766bb4c70cc2ec41c1d1e458.pdf), which consider user behavior, on-chain liquidity, and price impact, ensuring that the higher cap does not introduce additional risk to the platform. # **Specification** | Chain | Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap | | --- | --- | --- | --- | --- | --- | --- | | Ethereum | Main | sUSDe | 512,000,000 | 750,000,000 | - | - | # **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) ---
**Author:** ![Lolly88](https://avatars.discourse-cdn.com/v4/letter/l/ecd19e/32.png) [@Lolly88](https://governance.aave.com/u/Lolly88)\ **Post date:** [December 5, 2024, 3:20pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-12-05-24/20076/2 "2024-12-05T15:20:53Z")
Is there a specific time this will be implemented? ---
**Author:** ![Chilo](https://avatars.discourse-cdn.com/v4/letter/c/7cd45c/32.png) [@Chilo](https://governance.aave.com/u/Chilo)\ **Post date:** [December 5, 2024, 3:26pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-12-05-24/20076/3 "2024-12-05T15:26:12Z")
Guys, you will kill the borrow rate for stables, you shouldn’t do it ---
**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\ **Post date:** [January 4, 2025, 3:26pm UTC](https://governance.aave.com/t/arfc-chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-12-05-24/20076/4 "2025-01-04T15:26:15Z")
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