Author: ACI and Chaos Labs
Date: 2026-03-14
Summary
Following the CAPO oracle configuration incident affecting wstETH on Ethereum Core and Prime, this AIP proposes to restore the wstETH borrow caps to their previous values now that oracle configuration has been realigned.
Proposed caps (restore):
- Ethereum Core: wstETH borrow cap to 180,000 wstETH
- Ethereum Prime: wstETH borrow cap to 70,000 wstETH
Background
A technical incident affecting the CAPO risk oracle caused the reported wstETH/stETH exchange rate cap to fall below the valid market exchange rate on Ethereum Core and Prime. This created an approximately 2.85% downward deviation in the effective exchange rate used by the protocol and triggered E-Mode liquidations. The protocol incurred no bad debt, but users were impacted.
As an immediate containment measure, the wstETH borrow caps on both instances were temporarily reduced to 1.
Since then the configuration has since been realigned and the oracle reverted to its true value, enabling the DAO to proceed with reinstating the caps.
Motivation
The temporary caps were a safety measure to minimize exposure while remediation was underway. With the oracle configuration restored, reinstating the prior caps:
- returns wstETH borrowing capacity to normal operation on both instances,
- reduces disruption for users and integrators that rely on wstETH liquidity,
- aligns protocol parameters with the intended risk posture.
Specification
This AIP will execute the following parameter updates:
- Aave V3 Ethereum Core
- Set wstETH borrow cap from 1 back to 180,000.
- Aave V3 Ethereum Prime
- Set wstETH borrow cap from 1 back to 70,000.
Notes:
- This AIP is scoped to borrow caps only.
Disclaimer:
This proposal is powered by Skywards. ACI did not receive any compensation for creating this proposal.
Copyright
Copyright and related rights waived via CC0.