[ARFC] Chaos Labs Risk Stewards - Increase Supply Caps on V3 Metis - 07.26.2023


A proposal to increase the supply and borrow cap for WETH and supply cap for METIS on Aave V3 Metis.


The supply and borrow cap for WETH have reached 70% and 90% utilization, respectively, and METIS supply cap has reached 100% utilization on the V3 Metis deployment.

As the Metis deployment is relatively new with limited historical data and usage, we do not utilize our stress testing methodology for this set of recommendations. Instead, we utilized our previous supply cap methodology, which can be found here.

Despite this methodology being more conservative, it still permits the increase of the supply cap in light of the current DEX liquidity for WETH, which has seen growth since Aave’s initial launch on Metis, including the added liquidity in the Maia Uni V3 pools.
Given the current utilization of the caps and available liquidity, we recommend increasing both the supply and borrow caps by 1.5X to 300 WETH and 90 WETH, respectively.

We would like to point out that currently, there is only one account supplying 41% of the WETH to borrow USDT and USDC, with its current health factor at 1.09. We will continue monitoring usage patterns following the coming cap increase.

For Metis, as it is a non-collateral asset, we recommend increasing the supply cap by 2X to 60,000.


Chain Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
Metis WETH 200 300 60 90
Metis METIS 30,000 60,000 4,000 No Change

Next Steps

Once we receive feedback from @Gauntlet on the above recommendations, we will be able to move forward to implement these updates via the Risk Steward process.

We are aligned on the borrow/supply cap increases for WETH and the supply cap increase for METIS.

We’ve prepared the payload to be executed via the Risk Steward process for this proposal.


This has been executed via Risk Steward.

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