Chaos Labs Risk Stewards - Increase Supply Caps on Aave V3 - 06.07.25

Summary

A proposal to:

  • Increase PT-eUSDE-14AUG2025’s supply cap on the Ethereum Core instance.
  • Increase PT-USDe-31JUL2025’s supply cap on the Ethereum Core instance.

All cap 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.

PT-eUSDE-14AUG2025 (Ethereum Core)

PT-eUSDE-14AUG2025 is approaching its supply cap following continued deposits in the market.

Supply Distribution

Supply is not highly concentrated, with the largest four users accounting for 42% of the total market.

Liquidity and Market

The PT-eUSDE-14AUG2025’s liquidity has continued to improve, with a 120M swap able to be completed at less than 3% price slippage.

The PT-eUSDE-14AUG2025 market’s liquidity increased over the last week, with the SY token value rising above 120M.

The PT-eUSDE-14AUG2025 market saw yields compress slightly over the last week, though they have risen above 8% in recent days.

Recommendation

Based on the market’s liquidity, strong user demand, and observed behavior patterns, we recommend increasing the asset’s supply cap.

PT-USDe-31JUL2025 (Ethereum Core)

PT-USDe-31JUL2025 has reached 94% supply cap utilization, up 4.5% in the past 24 hours.

Supply Distribution

This market is relatively concentrated, with the largest user accounting for nearly 60% of the total supply. The account maintains a health score of 1.01 and is borrowing USDe against their PT token, reducing the risk of the position because it is borrowing its underlying.

Liquidity and Market

PT-USDe-31JUL2025’s Pendle AMM liquidity has not improved significantly since our last recommendation, with an 8M swap incurring less than 3% price slippage.

The asset’s on-chain liquidity has remained relatively stable over the past weeks, with over 8M in SY liquidity and under 2M in PT liquidity.

The PT-USDe-31JUL2025 market also saw compressed yields this week, though they recovered slightly and now rest at 7.4%.

Recommendation

Based on the market’s performance and user demand we recommend increasing the asset’s supply cap.

Specification

Instance Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
Ethereum Core PT-eUSDE-14AUG2025 400,000,000 600,000,000 - -
Ethereum Core PT-USDe-31JUL2025 120,000,000 180,000,000 - -

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