Summary
LlamaRisk recommends the following parameter changes based on user behavior, on-chain liquidity, and position health observed in the latest review of Aave V4 reserves.
Aave V4 Arc:
- Increase the draw cap for USDC on the Core Hub USDC Maple Spoke from 23M to 46M.
- Increase the add cap for syrupUSDC on the Core Hub USDC Maple Spoke from 25M to 50M.
Aave V4 Ethereum:
- Increase the add cap for USDe on the Plus Hub Ethena Ecosystem Spoke from 30M to 40M.
- Increase the add cap for USDC on the Plus Hub Ethena Ecosystem Spoke from 6M to 12M.
- Increase the draw cap for USDC on the Plus Hub Ethena Ecosystem Spoke from 6.375M to 12M.
- Increase the add cap for USDT on the Plus Hub Ethena Ecosystem Spoke from 6M to 12M.
- Increase the draw cap for USDT on the Plus Hub Ethena Ecosystem Spoke from 6.375M to 12M.
- Increase slope1 for USDC on the Plus Hub from 4.50% to 4.60%.
- Increase slope1 for USDT on the Plus Hub from 4.50% to 4.60%.
- Increase the base rate for USDe on the Plus Hub from 6.30% to 6.60%.
USDC and syrupUSDC (Arc Core Hub)
USDC on the Aave V4 Arc Core Hub holds 143.45M added and 83.82M drawn, for a hub utilization of 58.4% against an optimal usage ratio of 90.00%. Available hub liquidity stands at 59.63M USDC.
syrupUSDC Supply Distribution
Source: LlamaRisk, October 9, 2026
syrupUSDC supply on the USDC Maple Spoke is concentrated, with the two largest positions holding approximately 97% of the reserve at health factors of 1.02 and 1.01. All outstanding debt among syrupUSDC suppliers is USDC drawn against syrupUSDC collateral, so HF in the cohort tracks the syrupUSDC price relative to USDC.
Recommendation
The USDC draw cap on the USDC Maple Spoke is fully utilized, and the syrupUSDC add cap is 87.8% utilized. The proposed draw cap of 46M lands at approximately 50.0% post-change draw cap utilization, and the proposed syrupUSDC add cap of 50M at approximately 43.9% post-change add cap utilization.
USDe (Plus Hub)
| Spoke | Added | Add Cap | Add Cap Utilization |
|---|---|---|---|
| Ethena Ecosystem | 26,157,035 | 30,000,000 | 87.2% |
USDe Supply Distribution
Source: LlamaRisk, October 9, 2026
The largest USDe suppliers on the Ethena Ecosystem Spoke hold USDe as collateral against stablecoin debt drawn from both the Core Hub and the Plus Hub, with twelve of the top twenty carrying debt at health factors between 1.00 and 1.41 and a median of 1.02. frxUSD is the largest borrowed asset, followed by USDT and USDC, so HF stability depends on the Ethena incentives and the stablecoin borrow rate spread.
Recommendation
The USDe add cap on the Plus Hub Ethena Ecosystem Spoke is 87.2% utilized. The proposed add cap of 40M lands at approximately 65.4% post-change add cap utilization.
USDC and USDT (Plus Hub)
USDC on the Plus Hub holds 2.99M added and 2.55M drawn, for a hub utilization of 85.3%, and USDT holds 3.04M added and 2.70M drawn, for a hub utilization of 88.9%, both against an optimal usage ratio of 92.00%.
| Spoke | Asset | Added | Add Cap | Add Cap Utilization | Drawn | Draw Cap | Draw Cap Utilization |
|---|---|---|---|---|---|---|---|
| Ethena Ecosystem | USDC | 2,990,228 | 6,000,000 | 49.8% | 2,554,610 | 6,375,000 | 40.1% |
| Ethena Ecosystem | USDT | 3,037,567 | 6,000,000 | 50.6% | 2,704,645 | 6,375,000 | 42.4% |
Recommendation
We recommend increasing the USDC and USDT add and draw caps to 12M to create room for native liquidity deposits on Plus Hub and reduce reliance on credit lines, which currently dominate borrowing.
USDC and USDT IRM (Plus Hub)
The proposed change raises slope1 (rateGrowthBeforeOptimal) for USDC and USDT on the Plus Hub from 4.50% to 4.60%. The optimal usage ratio (92.00%), base rate (0.00%), and slope2 (20.00%) remain unchanged.
At current hub utilization, the USDC borrow rate moves from 4.17% to 4.27% and the USDT borrow rate from 4.35% to 4.45%. At the 92.00% optimal point the borrow rate rises from 4.50% to 4.60%, and at 100% utilization from 24.50% to 24.60%.
Source: LlamaRisk, October 9, 2026
USDe IRM (Plus Hub)
The proposed change raises the base rate (baseDrawnRate) for USDe on the Plus Hub from 6.30% to 6.60%, to align with V3. The optimal usage ratio (90.00%), slope1 (0.25%), and slope2 (30.00%) remain unchanged, so the curve shifts up by 0.30 percentage points at every utilization level, to 6.85% at the optimal point and 36.85% at 100% utilization.
USDe utilization on the Plus Hub stands at 0.04%, with 10,272 USDe drawn against 26.19M added.
Specification
Add Caps
| Hub | Spoke | Asset | Current Add Cap | Recommended Add Cap |
|---|---|---|---|---|
| Arc Core | USDC Maple | syrupUSDC | 25,000,000 | 50,000,000 |
| Ethereum Plus | Ethena Ecosystem | USDe | 30,000,000 | 40,000,000 |
| Ethereum Plus | Ethena Ecosystem | USDC | 6,000,000 | 12,000,000 |
| Ethereum Plus | Ethena Ecosystem | USDT | 6,000,000 | 12,000,000 |
Draw Caps
| Hub | Spoke | Asset | Current Draw Cap | Recommended Draw Cap |
|---|---|---|---|---|
| Arc Core | USDC Maple | USDC | 23,000,000 | 46,000,000 |
| Ethereum Plus | Ethena Ecosystem | USDC | 6,375,000 | 12,000,000 |
| Ethereum Plus | Ethena Ecosystem | USDT | 6,375,000 | 12,000,000 |
IRM
| Hub | Asset | Parameter | Current | Recommended |
|---|---|---|---|---|
| Ethereum Plus | USDC | Slope 1 | 4.50% | 4.60% |
| Ethereum Plus | USDT | Slope 1 | 4.50% | 4.60% |
| Ethereum Plus | USDe | Base Rate | 6.30% | 6.60% |
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.