# Chaos Labs Risk Stewards - Increase Supply Caps and Borrow Caps on Aave V3 - 05.28.25 **URL:** \ **Category:** Governance\ **Created:** [May 28, 2025, 9:50am UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-and-borrow-caps-on-aave-v3-05-28-25/22197 "2025-05-28T09:50:11Z")\ **Posts on this page:** 2\ **Page:** 1
**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:** [May 28, 2025, 9:50am UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-and-borrow-caps-on-aave-v3-05-28-25/22197/1 "2025-05-28T09:50:11Z")
# **Summary** A proposal to: - Increase PT-sUSDE-31JUL2025’s supply cap on the Ethereum Core instance. - Increase PT-USDE-31JUL2025’s supply cap on the Ethereum Core instance. - Increase PT-eUSDE-14AUG2025’s supply cap on the Ethereum Core instance. - Increase ETH’s borrow cap on the BNB Chain instance. All cap increases are backed by [Chaos Labs’ risk simulations](https://cdn.sanity.io/files/zmh9mnff/production/130e1060165f7ab0766bb4c70cc2ec41c1d1e458.pdf), 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 again reached full supply cap utilization following the most recent cap increase. ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/f/f5ea2fb1dd1fd490e1d3edb893cd3a19eaab4905.png) ![image (1)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/3/328715d7bd4b64ea6f6874a31e9cd13b67bbc780.png) ### Supply Distribution The supply distribution of PT-sUSDE is not concentrated, with the top supplier accounting for 14% of the total and the top 10 accounting for less than 70% combined. The top user is borrowing USDT and USDC, both of which are highly correlated with the collateral asset, reducing liquidation risk. ![image (2)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/a/a0ed94d7f53f77ed2b792fb3560af24f746f2ac1.png) Other top suppliers are also borrowing USDT, USDC, and USDS, minimizing the likelihood of large-scale liquidations. ### Liquidity and Market Backed by on-chain liquidity in the Pendle AMM, the PT-sUSDE-31JUL2025 market currently supports swaps of up to 65M sUSDe with under 3% slippage, up from 62M at the time of our last recommendation. ![image (3)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/ef9112bcd1e58c86930ebc5a57e15d1db78ac326.png) The asset’s on-chain liquidity has been steady in recent days, with total SY liquidity holding at just under $67M. ![image (4)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/7/751f83e02432cba7cab8a56b1cc1d93a76d5bd38.png) The PT-sUSDE-31JUL2025 market has maintained a steady yield since May 10, primarily ranging between 9% and 10%. ![image (5)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/b/b6c0a1e0a2405c4fcb952982f24e016d49cd624e.png) ### Recommendation Given user behavior, the market’s liquidity, and the high demand for the asset, we recommend increasing the supply cap by 150M PT-sUSDE-31JUL2025. ## PT-USDE-31JUL2025 (Ethereum Core) PT-USDE-31JUL2025 rapidly reached full supply cap utilization following its listing on Aave. ![image (6)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/c/cf7ca01af49d8a54d8e02728f4f1e4ce9f538922.png) ### Supply Distribution The supply distribution of PT-USDE is somewhat concentrated, with the largest supplier representing nearly 74% of the total. ![image (7)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e5c266c0d6335a6482464b548d486aaa3cdff004.png) As in the market above, these users are effectively limited to borrowing assets that are highly correlated with PT-USDE, significantly reducing the risk of liquidations in this market. Additionally, the floating PT-USDE supply increased significantly since our previous listing recommendation to 80M PT-USDE. ![image (8)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/8/807fe55db22bde04143203053b8e85c8e9c5637b.png) ### Liquidity and Market PT-USDE-31JUL2025’s Pendle AMM liquidity currently supports swaps of up to 8M USDe with under 3% slippage. ![image (9)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/a/a3e53573c27342122f7695c53f3ee8f49f712bd1.png) The asset’s on-chain liquidity has improved recently, with SY liquidity rising to nearly 10M in the past few days. ![image (10)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/9/9d0731620cf451189ba51ad11e60eabc30260408.png) Finally, the market has displayed a gradually rising yield since April, increasing from 6% to just under 9% as of this writing. ![image (11)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/8/835c738a2a0a1d7cfb90c62dd806829952dcc9f1.png) ### Recommendation Given user behavior, the market’s liquidity, and the high demand for the asset, we recommend doubling the asset’s supply cap. ## PT-eUSDE-14AUG2025 (Ethereum Core) PT-eUSDE-14AUG2025 also rapidly reached nearly full supply cap utilization following its listing on Aave. ![image (12)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/c/c47e9432ad26db325c89769e50449fdff854c502.png) ### Supply Distribution The supply distribution of PT-eUSDE is less concentrated than above, with the largest supplier representing 32.5% of the total. ![image (13)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/8/8a4b6037247665b82fedb621215648242752028e.png) As in the other PT markets, these users are limited to borrowing assets that are highly correlated with PT-eUSDE, reducing the risk in this market. ### Liquidity and Market PT-eUSDE-14AUG2025’s Pendle AMM liquidity currently supports swaps of 47M eUSDE at less than 3% price slippage. ![image (14)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/1/1d1a38a520d8f2034816ed37a2c0b4282cec4506.png) The asset’s on-chain liquidity has improved substantially recently, as total SY liquidity has reached $50M, up from $32M since initial listing recommendations. ![image (15)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/3/3a95723c9621fd71e33f72514c85c20781b4e58b.png) Finally, the market’s APY has ranged between 11% and 8% since its launch, recently dipping to 8% before recovering to just under 8.5%. ![image (16)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/9/9d19e8f0dce5b7fdb5cb1339201df4de458be10a.png) ### Recommendation Given user behavior, the market’s liquidity on Pendle, and the high demand for the asset, we recommend increasing the asset’s supply cap. ## ETH (BNB Chain) ETH on BNB Chain has reached fully borrow cap utilization following new activity in the market. ![image (17)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/9/907d858d9ae94850df014e656dd325f915968752.png) ![image (18)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/0/029bf4313c3543acee92d9d896f5c7ac9c638674.png) ### Borrow Distribution ETH borrows are somewhat concentrated, with the top three wallets accounting for 67.75% of the total amount borrowed. However, these three users are all borrowing ETH against wstETH, limiting their risk of liquidation. ![image (19)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/8/8a91f612e4ef5f5e3dd2e35c28c4835a1e283ac8.png) Recent borrowing activity has largely been driven by wstETH collateral, maintaining this as a relatively low risk market. ![image (20)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/f/f639e44f9f9015b652ada96a48946ee8c7665be7.png) ### Liquidity ETH’s liquidity is relatively strong on BNB Chain and is sufficient to support an increase in the asset’s borrow cap. ![image (21)](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/8/87e5dfa3f9f4c569063489744f4837ffea105301.png) ### Recommendation Taking into account user behavior and on-chain liquidity, we are able to recommend doubling ETH’s borrow cap. # **Specification** | **Instance** | **Asset** | **Current Supply Cap** | **Recommended Supply Cap** | **Current Borrow Cap** | **Recommended Borrow Cap** | | --- | --- | --- | --- | --- | --- | | Ethereum Core | PT-sUSDE-31JUL2025 | 650,000,000 | 800,000,000 | - | - | | Ethereum Core | PT-USDE-31JUL2025 | 40,000,000 | 80,000,000 | - | - | | Ethereum Core | PT-eUSDE-14AUG2025 | 100,000,000 | 200,000,000 | - | - | | BNB Chain | ETH | 10,000 | - | 4,000 | 8,000 | # **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) ---
**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\ **Post date:** [June 27, 2025, 9:50am UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-and-borrow-caps-on-aave-v3-05-28-25/22197/2 "2025-06-27T09:50:44Z")
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