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 Core:
- Increase supply cap for LBTC from 2,240 to 2,690.
Aave V3 Linea:
- Reduce supply cap for WETH from 40,000 to 7,950.
- Reduce borrow cap for WETH from 36,000 to 7,150.
LBTC (Aave V3 Core)
LBTC has reached 97.4% supply cap utilization (2,181 / 2,240) on the Aave V3 Core instance.
Supply Distribution
Source: LlamaRisk, June 5, 2026
The top twenty LBTC suppliers run health factors between 1.12 and 16.15 with a median of 1.41, and seventeen of twenty carry outstanding debt. Fourteen of the seventeen borrow stablecoins (USDT, USDtb, and USDC dominate by value), so HF for most of the cohort tracks the BTC price; the remaining three borrow WBTC, cbBTC, or WETH, and the BTC-denominated debt is price-correlated with the LBTC collateral.
Recommendation
We recommend raising the supply cap from 2,240 to 2,690 LBTC on Aave V3 Core. Supply has held near the 2,240 ceiling at 97.4% cap utilization, the proposed increase lands at approximately 81% post-change utilization, and the supplier base borrows predominantly stablecoins against LBTC collateral.
Cap Reductions
The following reserves have material idle headroom relative to current demand, and the proposed caps tighten that buffer.
WETH on Aave V3 Linea sits at 13.9% supply cap utilization (5,567 / 40,000). The proposed cap of 7,950 is approximately 1.43x current outstanding supply, landing at approximately 70.0% post-change cap utilization. WETH on Aave V3 Linea sits at 9.5% borrow cap utilization (3,406 / 36,000). The proposed cap of 7,150 is approximately 2.10x current outstanding borrow, landing at approximately 47.6% post-change cap utilization.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Aave V3 Core | LBTC | 2,240 | 2,690 | — | — |
| Aave V3 Linea | WETH | 40,000 | 7,950 | 36,000 | 7,150 |
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.