Chaos Labs Risk Stewards - Increase Supply Caps on Aave V3 - 04.13.25

Summary

A proposal to:

  • Increase EURC’s supply cap on the Base instance.

All 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.

EURC (Base)

EURC’s supply cap utilization has reached 65%, and its borrow cap utilization has reached 63%.

Supply Distribution

The supply of EURC presents no immediate liquidation risk, as all top suppliers have no borrowing activity. While the distribution is somewhat concentrated, with the top supplier accounting for 18% of the total supply, the absence of borrowing activity among suppliers ensures that no significant liquidation risk is present.

The top three borrowed assets against EURC are GHO, USDC, and EURC itself, all of which are stablecoins, significantly reducing the risk of large-scale liquidations.

Liquidity

EURC’s supply has experienced fluctuations but remained generally stable over the past three months, supporting a supply cap increase.

Recommendation

Given user behavior and on-chain liquidity, we recommend increasing the supply cap to 8.4M EURC.

Specification

Instance Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
Base EURC 4,200,000 8,400,000 3,800,000 -

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

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