# Gauntlet Borrow and Supply Cap Recommendations for Ethereum and Arbitrum Aave V3 2023-08-16 **URL:** \ **Category:** Governance\ **Created:** [August 16, 2023, 5:45pm UTC](https://governance.aave.com/t/gauntlet-borrow-and-supply-cap-recommendations-for-ethereum-and-arbitrum-aave-v3-2023-08-16/14517 "2023-08-16T17:45:34Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/gauntlet/32/4064_2.png) [@Gauntlet](https://governance.aave.com/u/Gauntlet)\ **Post date:** [August 16, 2023, 5:45pm UTC](https://governance.aave.com/t/gauntlet-borrow-and-supply-cap-recommendations-for-ethereum-and-arbitrum-aave-v3-2023-08-16/14517/1 "2023-08-16T17:45:34Z")
## Gauntlet Borrow and Supply Cap Recommendations for Ethereum and Arbitrum Aave V3 2023-08-16 Per Gauntlet’s supply and borrow cap methodology, we recommend increasing rETH supply cap on Arbitrum v3 to 1700 and increasing LUSD supply cap on Ethereum v3 to 12m. ## Specifications | Chain | Asset | Cap | Current | Recommended | | --- | --- | --- | --- | --- | | Arbitrum | rETH | Supply | 1300 | 1700 | | Ethereum | LUSD | Supply | 6m | 12m | ## Motivation rETH cap usage is at 97% on Arbitrum v3. LUSD cap usage is at 95% on Ethereum v3. ## Next Steps Once we receive feedback from @ChaosLabs on the above recommendations, we will move forward with Risk Steward or AIP actions. ---
**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:** [August 17, 2023, 1:17pm UTC](https://governance.aave.com/t/gauntlet-borrow-and-supply-cap-recommendations-for-ethereum-and-arbitrum-aave-v3-2023-08-16/14517/2 "2023-08-17T13:17:41Z")
We support the proposed updates. Additionally, for rETH, we recommend increasing the caps by 2X to 2,600 rETH. Utilizing our stress test [methodology](https://governance.aave.com/t/chaos-labs-supply-cap-methodology/12842) for supply caps, we found that increasing the supply by 2X does not increase the VaR of the system. ![367748543_1247017432634437_6747323376246534355_n](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/9/9063f77f64500b410bfcb891c0e490f5ce1ac4f5.webp) ---
**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/gauntlet/32/4064_2.png) [@Gauntlet](https://governance.aave.com/u/Gauntlet)\ **Post date:** [August 17, 2023, 3:35pm UTC](https://governance.aave.com/t/gauntlet-borrow-and-supply-cap-recommendations-for-ethereum-and-arbitrum-aave-v3-2023-08-16/14517/3 "2023-08-17T15:35:26Z")
We also recommend increasing rETH borrow cap on Arbitrum v3 to 340. ## Specifications | Chain | Asset | Cap | Current | Recommended | | --- | --- | --- | --- | --- | | Arbitrum | rETH | Borrow | 170 | 340 | ## Motivation rETH borrow cap usage is at 94% on Arbitrum v3. ## Next Steps Once we receive feedback from @ChaosLabs on the above recommendation, we will bundle it together with the LUSD Supply Cap on Ethereum v3, rETH Supply Cap on Arbitrum v3 recommendations for Risk Steward. ---
**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:** [August 17, 2023, 5:54pm UTC](https://governance.aave.com/t/gauntlet-borrow-and-supply-cap-recommendations-for-ethereum-and-arbitrum-aave-v3-2023-08-16/14517/4 "2023-08-17T17:54:56Z")
We support the additional recommendation for the rETH borrow cap. Can @Gauntlet provide feedback on the recommendation to increase the supply cap of rETH to 2,600 instead of 1,700? ---
**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/gauntlet/32/4064_2.png) [@Gauntlet](https://governance.aave.com/u/Gauntlet)\ **Post date:** [August 18, 2023, 11:08pm UTC](https://governance.aave.com/t/gauntlet-borrow-and-supply-cap-recommendations-for-ethereum-and-arbitrum-aave-v3-2023-08-16/14517/5 "2023-08-18T23:08:03Z")
Given alignment of the two risk providers on the more conservative of the proposed cap updates, we’ve queued the risk steward transactions here. Our current methodology does not support raising the rETH supply caps on Arbitrum to 2600 at this time. Arbitrum: [Safe{Wallet} – Transaction queue](https://app.safe.global/transactions/queue?safe=arb1:0x3Be327F22eB4BD8042e6944073b8826dCf357Aa2) Ethereum: [Safe{Wallet} – Transaction queue](https://app.safe.global/transactions/queue?safe=eth%3A0x47c71dFEB55Ebaa431Ae3fbF99Ea50e0D3d30fA8) ---
**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:** [August 19, 2023, 2:17am UTC](https://governance.aave.com/t/gauntlet-borrow-and-supply-cap-recommendations-for-ethereum-and-arbitrum-aave-v3-2023-08-16/14517/6 "2023-08-19T02:17:07Z")
This proposal has been executed via Risk Steward. ---
**Author:** ![system](https://europe1.discourse-cdn.com/flex013/uploads/aave/original/2X/e/e11637c36f45ffa158f2146f5c19438d46e0824d.svg) [@system](https://governance.aave.com/u/system)\ **Post date:** [September 18, 2023, 2:18am UTC](https://governance.aave.com/t/gauntlet-borrow-and-supply-cap-recommendations-for-ethereum-and-arbitrum-aave-v3-2023-08-16/14517/7 "2023-09-18T02:18:00Z")
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