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 Ethereum:
- Increase slope1 for USDC and USDT on the Plus Hub from 4.60% to 4.70%.
- Increase the add cap for USDT on the Prime Hub Bluechip Spoke from 13.125M to 20M.
- Increase the draw cap for USDT on the Prime Hub Bluechip Spoke from 15.625M to 18.4M.
- Decrease the draw cap for USDG on the Global Dollar Hub PAXG Gold Spoke from 9.5M to 5M.
- Increase the add cap for USDG on the Global Dollar Hub USDG Maple Spoke from 55M to 65M.
- Increase the draw cap for USDG on the Global Dollar Hub USDG Maple Spoke from 50M to 60M.
- Increase the add cap for syrupUSDG on the Global Dollar Hub USDG Maple Spoke from 70M to 75M.
- Decrease the draw cap for USDG on the Global Dollar Hub USDG Pendle Spoke from 4M to 0.
- Decrease the draw cap for USDG on the Core Hub USDG Pendle Spoke from 15M to 0.
Aave V4 Avalanche:
- Increase the add cap for WAVAX on the Core Hub Main Spoke from 1M to 2M.
USDC and USDT IRM (Plus Hub)
USDC and USDT on the Plus Hub have supplies of 3.00M and 3.03M, with utilization rates of 89.2% and 91.7%, respectively. The Plus Hub applies a 15% liquidity fee, compared with 10% on the Core and Prime Hubs, so at the current slope1 of 4.60%, the supply rate on the Plus Hub sits below most comparable passive stablecoin supply yields on Ethereum.
| Venue | USDC Supply APY | USDT Supply APY |
|---|---|---|
| Aave V3 Core (30-day average) | 4.17% | 3.86% |
| Aave V4 Core Hub (October median) | 4.33% | 3.54% |
| Aave V4 Prime Hub (October median) | 4.13% | 3.73% |
| Aave V4 Plus Hub, current | 3.44% | 3.64% |
| Aave V4 Plus Hub, proposed | 3.51% | 3.72% |
At current utilization, the proposed slope1 of 4.70% raises the Plus Hub supply APY by 0.07 percentage points for USDC and 0.08 percentage points for USDT, and to 3.74% at the optimal point.
On the borrow side, the USDC rate at current utilization moves from 4.46% to 4.55% and the USDT rate from 4.58% to 4.68%. The optimal usage ratio (92.00%), base rate (0.00%), and slope2 (20.00%) remain unchanged.
Source: LlamaRisk, October 23, 2026
Recommendation
We recommend increasing slope1 for USDC and USDT on the Plus Hub from 4.60% to 4.70%, which makes the Plus Hub supply rate more attractive to depositors. Ethena incentives are live at a 5.5% target APR, which keeps USDe stablecoin loops profitable at the proposed borrow rates while retaining a spread slightly better than on the Aave V3 Core market.
USDT (Prime Hub)
USDT on the Prime Hub holds 2.98M added and 2.53M drawn, for a hub utilization of 84.8% against an optimal usage ratio of 92.00%. The Bluechip Spoke accounts for all USDT drawn on the Prime Hub.
Recommendation
The proposed caps raise the USDT add cap on the Bluechip Spoke to 20M and the draw cap to 18.4M, creating headroom for larger USDT deposits and the borrowing they support on the Prime Hub. The proposed add cap lands at approximately 14.9% post-change add cap utilization, and the proposed draw cap at approximately 13.7% post-change draw cap utilization.
USDG and syrupUSDG (Global Dollar Hub)
USDG on the Global Dollar Hub holds 54.54M added and 48.93M drawn, for a hub utilization of 89.7% against an optimal usage ratio of 90.00%. Available hub liquidity stands at 5.61M USDG.
| Spoke | Added | Add Cap | Add Cap Utilization | Drawn | Draw Cap | Draw Cap Utilization |
|---|---|---|---|---|---|---|
| USDG Maple | 54,133,179 | 55,000,000 | 98.4% | 46,068,953 | 50,000,000 | 92.1% |
| PAXG Gold | 209,194 | 5,000,000 | 4.2% | 2,861,844 | 9,500,000 | 30.1% |
USDG Supply Distribution
Source: LlamaRisk, October 23, 2026
USDG supply on the USDG Maple Spoke is passive and concentrated, with the two largest positions holding approximately 89% of the reserve.
syrupUSDG Supply Distribution
Source: LlamaRisk, October 23, 2026
syrupUSDG supply on the USDG Maple Spoke stands at 65.73M against an add cap of 70M, with the three largest positions holding approximately 35% of the reserve. The largest suppliers hold syrupUSDG as collateral against USDG debt drawn from the Global Dollar and Core Hubs, and to a lesser extent USDC, at health factors between 1.00 and 2.49 with a median of 1.02. As collateral and debt are both dollar-denominated, HF of the positions track the syrupUSDG/USDG exchange rate rather than market price movements.
Recommendation
We recommend increasing the USDG Maple Spoke add cap to 65M and draw cap to 60M to accommodate new USDG supply and enable additional borrowing, increasing the syrupUSDG Maple Spoke add cap to 75M, and setting the PAXG Gold Spoke USDG draw cap to 5M, above the current 2.86M drawn.
PT-USDG-24SEP2026, the collateral asset on the USDG Pendle Spoke, matured on September 24, 2026. Setting the USDG draw cap on the spoke from 4M to 0 prevents new borrowing against the matured PT. No USDG is currently drawn on this line.
USDG (Core Hub)
The USDG Pendle Spoke also holds a 15M USDG draw line on the Core Hub, of which 25 USDG is drawn.
Recommendation
Setting this draw cap to 0 closes the remaining USDG borrowing line against the matured PT-USDG-24SEP2026. Existing debt is unaffected and can be repaid. If a new PT is onboarded to the spoke, the draw caps on both hubs will be reset to non-zero values at listing.
WAVAX (Avalanche Core Hub)
WAVAX on the Aave V4 Avalanche Core Hub holds 1.00M added and 0.40M drawn, for a hub utilization of 39.7% against an optimal usage ratio of 65.00%.
WAVAX Supply Distribution
Source: LlamaRisk, October 23, 2026
WAVAX supply on the Main Spoke is concentrated, with the three largest positions holding approximately 74% of the reserve. Borrowing positions among the largest suppliers hold USDC and USDt debt against WAVAX, in some cases alongside BTC.b and WETH.e collateral, at health factors between 1.15 and 10.2.
Recommendation
The WAVAX add cap on the Main Spoke is fully utilized. The proposed add cap of 2M lands at approximately 50.0% post-change add cap utilization.
Specification
Add Caps
| Hub | Spoke | Asset | Current Add Cap | Recommended Add Cap |
|---|---|---|---|---|
| Ethereum Prime | Bluechip | USDT | 13,125,000 | 20,000,000 |
| Ethereum Global Dollar | USDG Maple | USDG | 55,000,000 | 65,000,000 |
| Ethereum Global Dollar | USDG Maple | syrupUSDG | 70,000,000 | 75,000,000 |
| Avalanche Core | Main | WAVAX | 1,000,000 | 2,000,000 |
Draw Caps
| Hub | Spoke | Asset | Current Draw Cap | Recommended Draw Cap |
|---|---|---|---|---|
| Ethereum Prime | Bluechip | USDT | 15,625,000 | 18,400,000 |
| Ethereum Global Dollar | PAXG Gold | USDG | 9,500,000 | 5,000,000 |
| Ethereum Global Dollar | USDG Maple | USDG | 50,000,000 | 60,000,000 |
| Ethereum Global Dollar | USDG Pendle | USDG | 4,000,000 | 0 |
| Ethereum Core | USDG Pendle | USDG | 15,000,000 | 0 |
IRM
| Hub | Asset | Parameter | Current | Recommended |
|---|---|---|---|---|
| Ethereum Plus | USDC | Rate Growth Before Optimal | 4.60% | 4.70% |
| Ethereum Plus | USDT | Rate Growth Before Optimal | 4.60% | 4.70% |
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.