[ARFC] Chaos Labs Supply and Borrow Cap Updates - 04.21.2023

Governance
1

Simple Summary

A proposal to increase supply and borrow caps for the following caps on Aave V3:

  • Ethereum - wstETH
  • Arbitrum - WBTC, WETH
  • Optimism - WBTC, wstETH
  • Polygon - LINK, WBTC
  • Avalanche - WAVAX

Motivation

The objective of this proposal is to recommend updated supply and borrow caps for V3 assets that have recently reached over 75% utilization of either cap, and our methodologies allow for an increase of the caps.

The recommendations provided in this proposal were derived using Chaos Labs’ Supply and Borrow Cap Methodology. Below are the data considerations and recommendations for all assets:

Ethereum

wstETH

We recommend increasing the borrow cap from 6,000 to 12,000.
Our simulations have yielded the following results:

Untitled (65)
Untitled (65)1722Ă—1128 128 KB

Arbitrum

WETH

We recommend increasing the supply cap from 35,280 to 70,000 and the borrow cap from 11,170 to 20,000.
Our simulations have yielded the following results:

Untitled (59)
Untitled (59)1952Ă—1292 153 KB

WBTC

We recommend increasing the supply cap from 2,100 to 4,000.
Our simulations have yielded the following results:

Untitled (60)
Untitled (60)1920Ă—1254 77.2 KB

Optimism

wstETH

We recommend increasing the supply cap from 6,000 to 12,000. It is important to note that this recommendation takes into account that we expect to introduce an ETH-correlated E-Mode on Optimism in the coming weeks, which is expected to change the composition of positions.
Our simulations have yielded the following results:

Untitled (61)
Untitled (61)1920Ă—1304 90.5 KB

WBTC

We recommend increasing the supply cap from 620 to 1,200.
Our simulations have yielded the following results:

Untitled (62)
Untitled (62)1492Ă—1132 126 KB

Polygon

LINK

We recommend increasing the supply cap from 297,640 to 370,000.
Our simulations have yielded the following results:

Untitled (63)
Untitled (63)1920Ă—1398 98.5 KB

WBTC

We recommend increasing the supply cap from 1,550 to 3,100. This increase will allow the migration of additional V2 positions.
Our simulations have yielded the following results:

Untitled (64)
Untitled (64)1920Ă—1300 82.7 KB

Avalanche

WAVAX

We recommend increasing the borrow cap from 1,200,000 to 2,400,000
Our simulations have yielded the following results:

Untitled (66)
Untitled (66)1920Ă—1165 75.6 KB

Recommendations

Chain Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
Ethereum wstETH 200,000 No Change 6,000 12,000
Arbitrum WBTC 2,100 4,200 1,115 No Change
Arbitrum WETH 35,280 70,000 11,170 20,000
Optimism wstETH 6,000 12,000 940 No Change
Optimism WBTC 620 1200 250 No Change
Polygon LINK 297,640 370,000 163,700 No Change
Polygon WBTC 1,550 3,100 851 No Change
Avalanche WAVAX 3,000,000 No Change 1.2M 2.4M

Next Steps

We invite a community discussion around the proposed parameter updates and utilizing the Aave V3 Caps Framework and are targeting an AIP (Ethereum, Arbitrum, Optimism, Polygon) and Snapshot (Avalanche) for Monday, April 24th.

2 Likes
2

Quick note @ChaosLabs - we mention here that we plan on incorporating a wETH supply cap Arbitrum increase from 35,280 to 45,000. @Llamaxyz is currently working on the AIP to incorporate this supply cap increase. From our understanding, their AIP’s been merged already, and they target Monday to publish the AIP.

1 Like
3

Thanks for the update. After this increase, the supply cap utilization will be close to 75%. We therefore still recommend increasing the cap to 70K in the coming vote, to reduce governance overhead.

4

We have published a Snapshot for the Avalanche updates for the community to vote on.

Start Date: Thursday, Apr 27, 2023, 6:20 PM
End Date: Sunday, Apr 30, 2023, 6:20 PM

We will follow up with the details of the AIP for the rest of the assets in the coming days.

5

We have published AIP-217 to update supply and borrow caps on V3 Ethereum, Arbirtum, Optimism and Polygon, starting in 24h.

Thank you in advance for your participation in the vote.

6

Any reason for going with the Optimism supply cap increase on wstETH to 12,000 while keeping Arbitrum at 4,650?

1 Like
7

Hi, so what happened to this proposal? @ChaosLabs

It was proposed here on April 21st, then went on the Aave governance page on May 4th, received 330,846 YAEs to 0 NAEs, appeared to be accepted and then May 8th the state went to cancelled. What happened here?

Thanks,

8

Hi @holden, we have posted an update on the status of this proposal.
We are working on resubmitting the AIP for a new vote ASAP.

9

Hello!
@ChaosLabs, i have a question.
I see that this AIP is “Executed”, but only Ethereum chain supply limits have changed. Are there any ways to track execution on Layer2 chains? Github, Arbiscan or smth like this ?
Thanks.

10

You can find the chain executors here: aave-address-book/AaveGovernanceV2.sol at main · bgd-labs/aave-address-book · GitHub
The delay is 2 days on all l2 executors.

11

Arbitrum Market

Version 3

WETH

Wrapped ETH

Total supplied

37.97K of

45,000.00

Why it’s 45k now , before this proposal is executed.