# Chaos Labs Risk Stewards - Increase Supply Caps on Aave V3 - 05.20.25

**URL:** <https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-05-20-25/22125>\
**Category:** Governance\
**Created:** [May 20, 2025, 3:02pm UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-05-20-25/22125 "2025-05-20T15:02:22Z")\
**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:** [May 20, 2025, 3:02pm UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-05-20-25/22125/1 "2025-05-20T15:02:22Z")

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# **Summary**

A proposal to:

- Increase PT-sUSDE-31JUL2025’s supply cap on the Ethereum Core instance.

All 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 once again reached full supply cap utilization following the most recent adjustment.

 ![Screenshot 2025-05-19 at 12.35.42 PM](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/b/ba50599f8302f6f2fe2e40f26ec91c8c2825c9ef.png)

 ![Screenshot 2025-05-19 at 12.34.50 PM](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/a/afd8f39559631faf3c111e02637ef2ddbee305f7.png)

### Supply Distribution

The supply of PT-sUSDE shows a minor concentration, with a single position accounting for approximately 20% of the total supply, equivalent to $91M. However, as this position is borrowing USDC and USDT, both of which are highly correlated with the asset, the associated liquidation risk is significantly mitigated.

 ![Screenshot 2025-05-19 at 12.36.18 PM](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/d/df3e68c40bd1799e6a27ec179e3b393162d5d3f5.png)

The remaining top positions are also borrowing USDT, USDC, and USDS, all of which are highly correlated assets, significantly reducing the risk of liquidation.

### Liquidity & Market

Backed by on-chain liquidity in the Pendle AMM, the PT-sUSDE-31JUL2025 market currently supports swaps of up to 50M sUSDe with under 3% slippage.

 ![Screenshot 2025-05-19 at 12.40.49 PM](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/b/b806f4b6f108f9e3b2270b6a941494e8cf1a0f5d.jpeg)

The PT-sUSDE market has delivered a consistent yield over the past week, remaining within the 9% to 10% range for most of the period.

 ![Screenshot 2025-05-19 at 12.42.03 PM](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/c/cffd1f1ef3942d5ee46bff372d84f00154a8915d.png)

### Recommendation

Given safe user behavior, the market’s liquidity, and the high demand for the asset, we recommend increasing the supply cap by 100M PT-sUSDE-31JUL2025.

# **Specification**

| **Instance** | **Asset** | **Current Supply Cap** | **Recommended Supply Cap** | **Current Borrow Cap** | **Recommended Borrow Cap** |
| --- | --- | --- | --- | --- | --- |
| Ethereum Core | PT-sUSDE-31JUL2025 | 450,000,000 | 550,000,000 | - | - |

# **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 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:** [June 19, 2025, 3:02pm UTC](https://governance.aave.com/t/chaos-labs-risk-stewards-increase-supply-caps-on-aave-v3-05-20-25/22125/2 "2025-06-19T15:02:56Z")

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Closed on June 19, 2025, 3:02pm UTC

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