[ARFC] Increase Supply and Borrow Caps at 100% Utilization December 2023

Title: [ARFC] Increase Supply and Borrow Caps at 100% Utilization December 2023

Author: @ACI - Aave Chan Initiative

Date: 2023-12-05


This ARFC proposes to increase supply and borrow caps on assets that currently have 100% or close to 100% utilization.


The ARFC proposes increasing supply and borrow caps on a number of assets to meet the ongoing market demand for depositing and borrowing. This increase will enable new Aave users to join Aave V3 and allow existing users to expand their positions. We will use the caps update framework and institute these changes as a direct-to-AIP proposal after review from risk managers. Supply caps on assets at supply cap will be increased by 50%. Borrow caps on 100% borrow utilization assets will be increased by 50%.

After a review from Chaos Labs, we propose changes on the following assets.


Asset Chain ID Current Supply Cap New Supply Cap Current Borrow Cap New Borrow Cap
LINK Arbitrum 1.45m 1.575m 242.25k 484.5k
wsETH Polygon 3.45k 4.37k 285.00 No Change

Next Steps:

  1. Community Engagement: Engage with the Aave community & risk service providers to gather feedback.
  2. Direct to AIP: If ARFC is greenlighted by at least one Aave risk service provider, direct to AIP.


The Aave-Chan Initiative is not affiliated with or paid by any third party to publish this ARFC.


Copyright and related rights waived via CC0.


We support the LINK cap increases for Arbitrum v3, and we’re happy to use risk steward to queue this cap increase if @ChaosLabs agrees as well. For additional context, current LINK supply cap usage is ~85% and borrow cap usage is ~75% on v3 Arbitrum, as of 2023-12-05.

For wstETH on Polygon v3, supply cap is at 60% circulating supply. The proposed cap is 75% circulating supply, which our methodologies do not support. If the community wishes to raise wstETH supply cap, we agree that AIP would be the preferred route.

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@Gauntlet we support the proposal to increase the LINK caps on Arbitrum and are happy to move forward with the Risk Steward.

Regarding wstETH, the supply cap recommendation above takes into consideration the community preferences as voted on here. While our methodologies also limit the supply cap at 50% of on-chain circulating supply for most assets, given the community support we are open to supporting this proposal via risk Steward to reduce governance overhead.


@ChaosLabs - sounds good, we are queueing a risk steward transaction for the LINK caps. As for wstETH, because our risk methodology does not approve of those cap increases, we would not use the risk steward for the wstETH changes.

We have queued up the risk steward for LINK borrow cap recommendations on Arbitrum linked here. We adjusted the new LINK borrow cap to 484,490, because the risk steward txn only allows for a change less than 2x the current borrow cap value (242.25k).

We have executed the transaction above to increase the supply and borrow caps for LINK.

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