# Chaos Labs Risk Stewards - Increase Supply Caps and Debt Ceiling on Aave V3 - 04.07.25

**URL:** https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-and-debt-ceiling-on-aave-v3-04-07-25/21726
**Category:** Governance
**Created:** [April 7, 2025, 6:29pm UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-and-debt-ceiling-on-aave-v3-04-07-25/21726 "2025-04-07T18:29:30Z")
**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: [April 7, 2025, 6:29pm UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-and-debt-ceiling-on-aave-v3-04-07-25/21726/1 "2025-04-07T18:29:30Z")

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# **Summary**

A proposal to:

- Increase the USDe supply cap and debt ceiling on the Ethereum Core instance.
- Increase WAVAX’s supply cap on the Avalanche instance.

## USDe (Core)

USDe’s supply cap and debt ceiling utilization has reached 100%.

[https://chaos-labs.notion.site/image/attachment%3A3bdaa726-b3bf-4d99-ba16-7764c0e3a8de%3AScreenshot\_2025-04-07\_at\_16.56.12.png?table=block&id=1ce57ab3-7ebf-807c-8571-d9612a2d9b77&spaceId=37a26014-0805-45d6-819b-8dae03264496&width=1420&userId=&cache=v2](https://chaos-labs.notion.site/image/attachment%3A3bdaa726-b3bf-4d99-ba16-7764c0e3a8de%3AScreenshot_2025-04-07_at_16.56.12.png?table=block&id=1ce57ab3-7ebf-807c-8571-d9612a2d9b77&spaceId=37a26014-0805-45d6-819b-8dae03264496&width=1420&userId=&cache=v2)

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/7/76aff4ab0919a290cadee4f6d5c729d9043ef89b.png)  
 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/4/4ac9cb30f647ece16abec4948fc9af1e487f706f.png)

### Supply Distribution

Although USDe distribution shows a high level of supply concentration — with the top supplier holding 72.5% of the total supply — the current positions present limited liquidation risk. This is because all borrowings against USDe amount to $50 million in stablecoins, and the top supplier is also among those borrowing stablecoins using USDe as collateral.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/f/f20a7816776cda37e626efced84a2ffc9bfa478a.png)  
 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/0/0a930b7281b0aeca4667a9364c3fc032773cb6cc.png)

### Recommendation

Given user behavior and the low risk of liquidations, we recommend increasing the supply cap to 240,000,000 USDe and debt ceiling to $60,000,000.

## WAVAX (Avalanche)

WAVAX has reached 76% supply cap utilization following new deposits.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/7/7b5e5039c6d606ab7cafaedd31d8e93bae911eee.png)  
 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/f/f802e6de700604967262a9b7ef844bbf36632ed3.jpeg)

### Supply Distribution

Supply is somewhat concentrated, with the largest user accounting for 42% of the total WAVAX supplied; this user is borrowing BTC.b and WETH.e against their collateral at a health score of 2, putting it at relatively low risk of liquidation.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/2/274c6af8ded6db76a6c66604f2854e078b31fbdd.jpeg)

WETH.e now accounts for a significant portion of the value borrowed against WAVAX, at nearly $18M.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/a/a021357f451af20ee589f4b95167df462f4fb273.jpeg)

### Liquidity

WAVAX’s on-chain DEX liquidity remains sufficient to allow us to recommend an increase in the asset’s supply cap. A 100K WAVAX for USDC swap can currently be completed at less than 10% price impact.

 ![image](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/4/4027271e58e5d8150f418857db3efb6024880370.jpeg)

### Recommendation

Given user behavior and on-chain liquidity, we recommend increasing WAVAX’s supply cap.

# **Specification**

| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
| --- | --- | --- | --- | --- | --- |
| Core | USDe | 120,000,000 | 240,000,000 | 110,000,000 | - |
| Avalanche | WAVAX | 12,000,000 | 14,500,000 | 7,200,000 | - |

| Instance | Asset | Current Debt Ceiling | Recommended Debt Ceiling |
| --- | --- | --- | --- |
| Core | USDe | 50,000,000 | 60,000,000 |

# **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 ARFC.

# **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: [May 7, 2025, 6:30pm UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-and-debt-ceiling-on-aave-v3-04-07-25/21726/2 "2025-05-07T18:30:15Z")

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