Chaos Labs Risk Stewards - Adjustment of Supply Caps on Aave V3 - 05.31.25

Summary

A proposal to:

  • Increase PT-sUSDE-31JUL2025’s supply cap on the Ethereum Core instance.
  • Increase PT-eUSDE-14AUG2025’s supply cap on the Ethereum Core instance.
  • Increase PT-USDe-31JUL2025’s supply cap on the Ethereum Core instance.
  • Decrease PT-eUSDE-29MAY2025’s supply cap on the Ethereum Core instance.

All cap increases are backed by Chaos Labs’ risk simulations, which consider user behavior, on-chain liquidity, and price impact, ensuring that higher caps do not introduce additional risk to the platform.

PT-sUSDE-31JUL2025 (Ethereum Core)

PT-sUSDE-31JUL2025 has once again reached full utilization of its supply cap after the latest increase.

Supply Distribution

The supply distribution of PT-sUSDE remains relatively dispersed, with the top supplier holding 11.7% of the total and the top 10 collectively accounting for 61%. The largest suppliers are currently borrowing USDT, USDC and USDS, all of which are closely correlated with the collateral asset, helping to mitigate liquidation risk.

Liquidity and Market

The PT-sUSDE-31JUL2025 market now supports swaps of up to 100M sUSDe with less than 3% slippage, an increase from 65M during our previous recommendation.

The asset’s on-chain liquidity has shown growth, with total SY liquidity maintaining a stable level above $100M, a significant increase from previous recommendation.

The PT-sUSDE-31JUL2025 market has continued to maintain a steady yield between 9% and 10%.

Recommendation

Given user behavior, the market’s liquidity, and the high demand for the asset, we recommend increasing the supply cap by 200M PT-sUSDE-31JUL2025.

PT-eUSDE-14AUG2025 (Ethereum Core)

PT-eUSDE-14AUG2025’s supply cap reached full utilization immediately after its recent listing.

Supply Distribution

The supply distribution of PT-eUSDE-14AUG2025 shows healthy diversification, with the top supplier holding 15.8% and the top 10 suppliers representing 70% of total supply. The majority of these suppliers are actively borrowing stablecoins, indicating a balanced risk profile.

Liquidity and Market

The PT-eUSDE-14AUG2025 market now demonstrates robust liquidity, supporting swaps of up to 80M eUSDe with less than 3% slippage. This represents a substantial improvement in market depth since the asset’s initial listing. The market’s growing liquidity profile aligns with increased user demand.

The PT-eUSDE-14AUG2025 market has demonstrated strong growth in SY liquidity, recently reaching $90M.

The PT-eUSDE-14AUG2025 market has maintained a yield between 8% and 10% in the last week.

Recommendation

Based on the market’s liquidity, strong user demand, and observed behavior patterns, we recommend doubling the supply cap of PT-eUSDE-14AUG2025.

PT-USDe-31JUL2025 (Ethereum Core)

PT-USDe-31JUL2025’s supply cap hit full utilization immediately after listing.

Supply Distribution

The supply distribution of PT-USDE shows moderate concentration, with the largest supplier holding 37.5% of the total supply. However, the distribution has become more balanced as supply caps have increased.

Liquidity and Market

PT-USDe-31JUL2025’s Pendle AMM liquidity currently supports swaps of slightly more than 8M USDe with under 3% slippage

The asset’s on-chain liquidity has remained stable recently, with SY liquidity ranging between 9M and 10M.

The PT-USDe-31JUL2025 market has maintained a steady yield ranging from 8% to 10% over the past week.

Recommendation

Based on the market’s performance and user demand we recommend increasing PT-USDe-31JUL2025’s supply cap by 40M.

PT-eUSDE-29MAY2025 (Ethereum Core)

PT-eUSDE-29MAY2025 has recently matured, and the majority of users have already migrated.

Recommendation

Given that PT-eUSDE-29MAY2025 has matured and users have largely migrated to newer maturities, in order to prevent additional deposits on the asset and start its deprecation process, we recommend decreasing its supply cap to 0.

Specification

Instance Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
Ethereum Core PT-sUSDE-31JUL2025 800,000,000 1,000,000,000 - -
Ethereum Core PT-eUSDE-14AUG2025 200,000,000 400,000,000 - -
Ethereum Core PT-USDe-31JUL2025 80,000,000 120,000,000 - -
Ethereum Core PT-eUSDE-29MAY2025 730,000,000 0 - -

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 AGRS recommendation.

Copyright

Copyright and related rights waived via CC0