Chaos Labs Risk Stewards - Decrease Supply and Borrow Caps on Aave V3 - 04.09.25

Overview

Chaos Labs recommends reducing the supply and/or borrow caps for select underutilized assets across Aave deployments. These adjustments are precautionary in nature and aim to better align protocol parameters with observed market activity. Should demand increase in the future alongside growth-specific risk requirements, we are prepared to revert these caps to their original levels.

Motivation

Through our ongoing monitoring of the Aave protocol, we have identified several assets with consistently low utilization. While these markets do not currently pose a significant risk, lowering their caps is a prudent step to mitigate theoretical exposure and ensure the protocol’s parameters reflect actual demand.

On ZkSync, assets such as WETH, USDC, and USDT have exhibited minimal supply and borrow activity in recent weeks. As illustrated below, cap utilization remains significantly low, indicating excess capacity relative to market interest.

Similarly, Scroll has experienced a notable contraction in on-chain liquidity. The supply caps for WETH, USDC, and wstETH remain substantially underutilized. Given the sustained low demand across these assets, we propose reducing their respective caps as a preventative measure.

Specification

Instance Asset Curr. Supply Cap Rec. Supply Cap Curr. Borrow Cap Rec. Borrow Cap
Scroll WETH 60K 30K 54K 27K
Scroll USDC 30M 10M 27M 9M
Scroll wstETH 6K 4.5K 1.3K -
ZkSync USDC 32M 15M 28.8M 13.5M
ZkSync WETH 15K 7K 11K 5.6K
ZkSync USDT 3M 2M 2.7M 1.8M

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