# \[ARFC\] wstETH Supply Cap Increase on Ethereum V3 **URL:** \ **Category:** Governance\ **Created:** [February 9, 2024, 7:13pm UTC](https://governance.aave.com/t/arfc-wsteth-supply-cap-increase-on-ethereum-v3/16591 "2024-02-09T19:13:41Z")\ **Posts on this page:** 7\ **Page:** 1
**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:** [February 9, 2024, 7:13pm UTC](https://governance.aave.com/t/arfc-wsteth-supply-cap-increase-on-ethereum-v3/16591/1 "2024-02-09T19:13:41Z")
## Summary This proposal aims to increase the wstETH Supply Cap on Ethereum V3 to support market growth. ## Motivation As seen in our [dashboard](https://risk.gauntlet.xyz/protocols/aave/markets/v3-ethereum/assets/wsteth?fullscreen=asset_timeseries_supply_cap_usage), over the past month, wstETH supply cap utilization has increased from 67% to 79% in Ethereum v3, with the current cap at 1.1M wstETH (worth $3.16B). **wstETH Supply Cap Utilization Time Series** ![image](https://hackmd.io/_uploads/ryYKglEia.png) Despite the high utilization, there’s still room for an additional $663M of wstETH to be supplied. The current largest wstETH supplier in v3 Ethereum supplies $665M. Therefore, the current cap is likely not inhibiting growth. However, to ensure ample capacity for future suppliers and to encourage LST growth on Aave, we propose raising the supply cap from 1.1M to 1.25M. This adjustment would lower the supply cap utilization from 79% to 70%. Per our supply cap [methodology](https://governance.aave.com/t/gauntlet-methodologies-borrow-and-supply-cap/11487) our recommendation of 1.25M is supported by the current 3M wstETH circulating supply. ## Specification Increase the supply cap for wstETH on Ethereum V3 to the following. | Parameter | Current Value | Proposed Value | | --- | --- | --- | | Supply Cap | 1.1M | 1.25M | ## Next Steps Once we receive feedback from @ChaosLabs on the above recommendations, we will move forward with Risk Steward actions. ## Disclaimer Gauntlet has not received any compensation from any third-party in exchange for recommending any of the actions contained in this proposal. _By approving this proposal, you agree that any services provided by Gauntlet shall be governed by the terms of service available at gauntlet.network/tos._ ## Copyright Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/). ---
**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:** [February 9, 2024, 9:18pm UTC](https://governance.aave.com/t/arfc-wsteth-supply-cap-increase-on-ethereum-v3/16591/2 "2024-02-09T21:18:55Z")
Considering the existing cap and usage, which permits an additional supply of 230.84k wstETH (~$666M), there’s ample space for more wstETH supply without the risk of hindering growth. Therefore, we currently see no immediate need to raise the cap. Over the last 90 days, the total supply of wstETH has increased by about 170 units. In the event of a sudden surge in demand, we are prepared to move quickly with an additional cap increase. ---
**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:** [February 16, 2024, 4:54am UTC](https://governance.aave.com/t/arfc-wsteth-supply-cap-increase-on-ethereum-v3/16591/3 "2024-02-16T04:54:09Z")
After observing an additional increase of over 69k wstETH supplied over the past week, bringing the supply cap utilization to 85%, we support increasing the caps as per the recommendation above. ---
**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:** [February 16, 2024, 3:38pm UTC](https://governance.aave.com/t/arfc-wsteth-supply-cap-increase-on-ethereum-v3/16591/4 "2024-02-16T15:38:05Z")
We will use the Risk Steward to increase the cap. We also note that the [proposal to increase wstETH LT/LTV parameters](https://vote.onaave.com/proposal/?proposalId=11&ipfsHash=0x2fa324a635a80a4f64b8636199440b6ef8687135aa81ccf396570eb8aecc7bed) was executed on 1/31/24 and therefore anticipate higher demand than existed over the previous 90 days. ---
**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:** [February 16, 2024, 10:11pm UTC](https://governance.aave.com/t/arfc-wsteth-supply-cap-increase-on-ethereum-v3/16591/5 "2024-02-16T22:11:39Z")
Risk steward transaction for the above cap recommendation has been submitted > **[Safe{Wallet}](https://app.safe.global/transactions/queue?safe=eth%3A0x47c71dFEB55Ebaa431Ae3fbF99Ea50e0D3d30fA8)** > > Safe (prev. Gnosis Safe) is the most trusted platform to manage digital assets on Ethereum and multiple EVMs. Over $40B secured. ---
**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:** [February 16, 2024, 11:09pm UTC](https://governance.aave.com/t/arfc-wsteth-supply-cap-increase-on-ethereum-v3/16591/6 "2024-02-16T23:09:05Z")
The transaction above was successfully executed. ---
**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\ **Post date:** [March 17, 2024, 11:09pm UTC](https://governance.aave.com/t/arfc-wsteth-supply-cap-increase-on-ethereum-v3/16591/7 "2024-03-17T23:09:23Z")
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