Summary
LlamaRisk recommends the following parameter changes based on user behavior, on-chain liquidity, and position health observed in the latest review of Aave V3 reserves.
- Increase the USDe base rate by 1% and decrease Slope1 by 1% on Core, Plasma, Monad, Mantle, and Avalanche.
- Increase USDC supply and borrow caps on Core.
- Increase GHO caps and decrease syrupUSDC and USDe supply caps on Monad.
- Decrease the syrupUSDT supply cap on Plasma.
- Increase the USDT0 borrow cap on X Layer.
USDC (Aave V3 Core)
USDC sits at 92.4% supply cap utilization, and 95.7% borrow cap utilization (2,153,878,518 / 2,250,000,000), for a reserve utilization of 93.3% against a 94.00% optimal utilization point. Both sides grew over the seven days to September 7, with supply up 1.4% and debt up 4.7%.
Supply Distribution
Source: LlamaRisk, September 7, 2026
The top twenty suppliers hold 31.8% of the reserve, with the largest at 8.4% and the top five at 22.2%, so the supply side is dispersed rather than dependent on any one depositor. Three of the twenty carry debt, and the remainder supply on a spot basis, which reads as cash lending into the reserve’s borrow yield rather than collateral posted to loop.
Borrow Distribution
Source: LlamaRisk, September 7, 2026
The top twenty borrowers account for 55.0% of outstanding debt, with the largest at 8.9%, and health factors run from 1.02 to 3.61, with a median of 1.70. The collateral behind that debt is predominantly WETH and cbBTC, followed by wstETH, weETH, and WBTC, so this is stablecoin borrowing against volatile collateral, where the buffer above liquidation absorbs ETH and BTC drawdowns rather than tracking a correlated pair.
Recommendation
Both caps stand within eight percentage points of full utilization, while the reserve trades just below its optimal utilization point. The proposed supply cap of 3,000,000,000 lands cap utilization at 77.0% and the proposed borrow cap of 2,700,000,000 lands at 79.8%. The borrow cap holds at 0.90x the supply cap.
wstETH (Aave V3 Prime)
wstETH sits at 100.0% supply cap utilization (61,996/62,000), leaving approximately 4 wstETH in deposit headroom. The supplied balance grew 7.8% over the seven days to September 7.
Supply Distribution
Source: LlamaRisk, September 7, 2026
The top twenty suppliers hold 92.5% of the reserve, with the largest at 34.1% and the top five at 72.7%, so the reserve is concentrated in a small set of positions. Sixteen of the twenty carry debt, with health factors between 1.02 and 3.12, with a median of 1.06, borrowing GHO and WETH againstwstETH collateral. The low HF cluster is the expected steady state for a wstETH and WETH pairing, where both legs are ETH-denominated and the HF only improves with the exchange rate over time.
Recommendation
The proposed cap of 80,000 is approximately 1.29x the current outstanding supply, resulting in approximately 77.5% post-change cap utilization. The borrow cap is unchanged.
GHO (Aave V3 Monad)
GHO sits at 92.4% supply cap utilization and 91.1% borrow cap utilization. Both sides grew over the seven days to September 7, with supply up 26.5% and debt up 37.5%.
Supply Distribution
Source: LlamaRisk, September 7, 2026
The top twenty suppliers hold 97.6% of the reserve, with the largest at 31.7% and the top five at 86.2%. Two of the twenty carry debt, and the remainder supply on a spot basis, so the supply side is close to entirely passive deposits earning the borrow yield, concentrated enough that the cap binds on the behavior of a small number of addresses.
Borrow Distribution
Source: LlamaRisk, September 7, 2026
The top twenty borrowers account for 91.0% of outstanding debt, with the largest at 31.4%, and every one of them borrows against stablecoin collateral, principally USDe, followed by PT-AUSD-8OCT2026 and syrupUSDC. Health factors range from 1.01 to 1.13, with a median of 1.03, the expected steady state for a correlated stablecoin pair where both legs are dollar-denominated.
Recommendation
Both caps stand within nine percentage points of full utilization while demand on both sides continues to grow, so each is raised by 50%. The proposed supply cap of 60,000,000, land cap utilization at 61.6%, and the proposed borrow cap of 54,000,000, at 60.7%. The borrow cap holds at 0.90x the supply cap.
USD₮0 (Aave V3 X Layer)
USD₮0 sits at 100.0% borrow cap utilization, so the cap is fully drawn and no further borrowing is possible. Outstanding debt grew 103.9% over the seven days to September 7. The supplied balance of 53,256,637 against a 100,000,000 supply cap leaves reserve utilization at 90.1% and available liquidity at 5,276,694.
The proposed cap of 90,000,000 lands borrow cap utilization at 53.3% and holds 0.90x the supply cap. Because the proposed cap exceeds the supplied balance, the borrow cap is no longer the binding constraint. Currently, available liquidity is 9.9% of the supplied balance, so withdrawals beyond that amount depend on repayment drawn by the higher rate.
Cap Decreases
All three reductions follow the same pattern, on Aave V3 Monad and Aave V3 Plasma, where the supplied balance has drawn down well below a cap sized for a larger reserve.
syrupUSDC (Aave V3 Monad)
syrupUSDC sits at 42.4% supply cap utilization, with the supplied balance down 11.5% over the seven days to September 7 and no approach to the cap at any point in that window. The proposed cap of 150,000,000 is approximately 1.48x the current outstanding supply, resulting in a cap utilization of 67.8% and retaining 48.3M in headroom.
USDe (Aave V3 Monad)
USDe sits at 41.3% supply cap utilization, with the supplied balance down 24.2% over the seven days to September 7, a period in which the base rate moved from 2.00% to 4.00%. Outstanding debt of 21,651,993 against a 36,000,000 borrow cap leaves reserve utilization at 23.8%. The proposed cap of 150,000,000 is approximately 1.65x the current outstanding supply, resulting in a cap utilization of 60.6%, with the borrow cap unchanged.
syrupUSDT (Aave V3 Plasma)
syrupUSDT sits at 37.6% supply cap utilization, with the supplied balance down 27.1% over the seven days to September 7. The proposed cap of 150,000,000 is approximately 1.33x the current outstanding supply, resulting in a cap utilization of 75.2% and retaining 37.2M in headroom.
USDe Interest Rate Model
The recommendation raises the USDe base rate by 100 BPS on all five deployments that carry USDe, continuing the move toward the 5.25% base rate set out in the stablecoin interest rate changes proposed by TokenLogic, which prices USDe borrowing in line with Ethena’s native staking rate. Each deployment pairs the base increase with a 100 BPS Slope1 reduction, continuing the blend toward the 0.25% Slope1 in the same proposal.
| Instance | Utilization | uOptimal | Current Borrow APR | New Borrow APR | Delta |
|---|---|---|---|---|---|
| Aave V3 Core | 40.9% | 90.0% | 5.36% | 5.91% | +55 BPS |
| Aave V3 Plasma | 27.7% | 85.0% | 5.30% | 5.98% | +67 BPS |
| Aave V3 Monad | 23.8% | 90.0% | 5.06% | 5.79% | +74 BPS |
| Aave V3 Mantle | 14.3% | 85.0% | 4.67% | 5.51% | +83 BPS |
| Aave V3 Avalanche | 66.5% | 80.0% | 6.49% | 6.66% | +17 BPS |
Because the optimal utilization point is unchanged on all five reserves, the share of supply held as withdrawal liquidity at that point is unchanged.
USDe Debt Migration
The base rate has moved in four steps so far, from 0.00% to 1.00% on August 28, to 2.00% on September 1, to 3.00% on September 3, and to 4.00% on September 5. The figures below cover the window from the fourth step to the current block, approximately 58 hours on both markets.
| Instance | USDe debt reduced | Re-borrowed other stablecoins | Share | Not re-borrowed |
|---|---|---|---|---|
| Aave V3 Core | 38.8M | 7.7M | 19.8% | 31.1M |
| Aave V3 Plasma | 24.7M | 0.4M | 1.7% | 24.3M |
On Aave V3 Core, 94 accounts reduced their USDe debt by 38.8M in aggregate. Of that reduction, 7.7M was replaced by USDC or USDT borrowing from the same accounts, across 25 accounts. A further 69 accounts repaid 30.8M without taking on other stablecoin debt on the same market. Within that group, accounts that still carry debt in other reserves account for 25.0M of the repayment, accounts that still hold collateral but no debt for 0.2M, and accounts that now have no position on the market at all for 5.6M. On Aave V3 Plasma, 25 accounts reduced USDe debt by 24.7M, and the equivalent residual repayment of 24.2M breaks down into 21.5M from accounts that continue to borrow and 2.7M from accounts that no longer have a position.
Measured this way, accounts that left Aave V3 Core entirely represent approximately 14% of the USDe debt reduction on that market, and approximately 11% on Aave V3 Plasma.
Specification
Caps
| Instance | Asset | Current Supply Cap | Recommended Supply Cap |
|---|---|---|---|
| Aave V3 Monad | syrupUSDC | 240,000,000 | 150,000,000 |
| Aave V3 Monad | GHO | 40,000,000 | 60,000,000 |
| Aave V3 Monad | USDe | 220,000,000 | 150,000,000 |
| Aave V3 Plasma | syrupUSDT | 300,000,000 | 150,000,000 |
| Aave V3 Core | USDC | 2,500,000,000 | 3,000,000,000 |
| Aave V3 Prime | wstETH | 62,000 | 80,000 |
| Instance | Asset | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|
| Aave V3 Monad | GHO | 36,000,000 | 54,000,000 |
| Aave V3 X Layer | USD₮0 | 48,000,000 | 90,000,000 |
| Aave V3 Core | USDC | 2,250,000,000 | 2,700,000,000 |
IRM
| Instance | Asset | Current Base Variable Rate | Recommended Base Variable Rate | Current Slope 1 | Recommended Slope 1 |
|---|---|---|---|---|---|
| Aave V3 Core | USDe | 4.00% | 5.00% | 3.00% | 2.00% |
| Aave V3 Plasma | USDe | 4.00% | 5.00% | 4.00% | 3.00% |
| Aave V3 Monad | USDe | 4.00% | 5.00% | 4.00% | 3.00% |
| Aave V3 Mantle | USDe | 4.00% | 5.00% | 4.00% | 3.00% |
| Aave V3 Avalanche | USDe | 4.00% | 5.00% | 3.00% | 2.00% |
Next Steps
We will move forward and implement these updates via the Risk Steward process. The implemented changes can be reviewed on the LlamaRisk Risk Stewards Dashboard.
Disclosure
This review was independently prepared by LlamaRisk, a DeFi risk service provider funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.