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.
Aave V3 MegaETH:
- Increase borrow cap for USDm from 280,000,000 to 450,000,000.
Aave V3 Prime:
- Reduce supply cap for tETH from 45,000 to 25,000.
USDm (Aave V3 MegaETH)
USDm has reached 100% borrow cap utilization (280,007,163 / 280,000,000) on the Aave V3 MegaETH instance. The supply side sits at 66.7% of its 1,000,000,000 cap.
Borrow Distribution
Source: LlamaRisk, May 7, 2026
The top borrowers post USDe as collateral against USDm, with a Health Factor cluster around 1.03 across the board, typical of leveraged stablecoin positions. Tight HFs in this configuration reflect the correlated nature of the assets being used in e-mode, making the liquidation risk limited.
Recommendation
Given full borrow cap utilization on USDm and structural demand running to the current ceiling, we recommend raising the borrow cap from 280,000,000 to 450,000,000, a 1.6x multiple of current outstanding. The supply cap stays at 1,000,000,000.
Cap Reductions
The following reserves have material idle headroom relative to current demand, and the proposed caps tighten that buffer.
On Aave V3 Prime, tETH has 16,688 deposited against a 45,000 supply cap (37.1% utilization). The proposed supply cap of 25,000 sits at 1.50x current deposits.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Aave V3 MegaETH | USDm | 1,000,000,000 | — | 280,000,000 | 450,000,000 |
| Aave V3 Prime | tETH | 45,000 | 25,000 | 1 | — |
Next Steps
We will move forward and implement these updates via the Risk Steward process.
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.