# Chaos Labs Risk Stewards - Increase Supply and Borrow Caps on Aave V3 - 03.28.25

**URL:** <https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-aave-v3-03-28-25/21593>\
**Category:** Governance\
**Created:** [March 28, 2025, 9:12am UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-aave-v3-03-28-25/21593 "2025-03-28T09:12:04Z")\
**Posts on this page:** 2\
**Page:** 1

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**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:** [March 28, 2025, 9:12am UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-aave-v3-03-28-25/21593/1 "2025-03-28T09:12:04Z")

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# **Summary**

A proposal to:

- Increase wstETH’s borrow cap on the Base instance
- Increase weETH’s supply cap on the Base instance

## wstETH (Base)

wstETH has reached 100% borrow cap utilization.

 ![image - 2025-03-28T120753.547](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/d/d65f7fcb50f2af85fbeb1a62ee5ba61840095364.png)

 ![image - 2025-03-28T120802.175](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/d/d32d92edd1fa993ca2835b0389d01e36d2be572d.png)

### Borrow Distribution

Borrows are somewhat concentrated, with the largest borrower using WETH as collateral, putting the position at limited liquidation risk.

 ![image - 2025-03-28T120805.467](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/b/b068f129007b3d5cd629cda9c73d2208c4b33f45.png)

wstETH had previously been used primarily as debt against ezETH, with the newest and largest borrower currently utilizing WETH as collateral.

 ![image - 2025-03-28T120808.223](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/f/fc3f73e5428ccba107f8409b0f9f81d4880a5c0f.png)

### Recommendation

Given on-chain liquidity and user behavior, we recommend doubling the borrow cap.

## weETH (Base)

weETH has reached 77% supply cap utilization while its borrow cap is fully utilized.

 ![image - 2025-03-28T120810.908](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/6/605ab0f0b434ea55348ec1bcedf173c520b35de7.png)

 ![image - 2025-03-28T120814.792](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/b/bfb3c3c54309d2fa44ab66d952165c95fdeb91d8.png)

### Supply Distribution

Its supply on Base is well-distributed, with the largest user accounting for about $13.5M.

 ![image - 2025-03-28T120817.876](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/4/41a55309e4fb413b3ab8d80b47ec1888f2a46060.png)

WETH represents virtually all of the value borrowed against weETH, reducing the risk in the market because of their correlation.

 ![image - 2025-03-28T120820.912](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/f/f703c06702097026f1c82b72050ce46facf198a1.png)

### Recommendation

Given on-chain liquidity and user behavior we recommend increasing the supply cap to 100,000.

# **Specification**

| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
| --- | --- | --- | --- | --- | --- |
| Base | wstETH | 18,000 | - | 2,080 | 4,000 |
| Base | weETH | 80,000 | 100,000 | 1 | - |

# **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](https://creativecommons.org/publicdomain)

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<div class="post-metadata">

**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\
**Post date:** [April 27, 2025, 9:12am UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-and-borrow-caps-on-aave-v3-03-28-25/21593/2 "2025-04-27T09:12:13Z")

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