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 BTC.b from 20 to 40.
Aave V3 Mantle:
- Increase supply cap for USDe from 10,000,000 to 20,000,000.
- Increase borrow cap for USDe from 9,000,000 to 18,000,000.
Aave V3 Base:
- Increase supply cap for cbETH from 50,000 to 75,000.
Aave V3 Monad:
- Increase supply cap for USDe from 20,000,000 to 40,000,000.
- Increase borrow cap for USDe from 18,000,000 to 36,000,000.
- Increase supply cap for sUSDe from 20,000,000 to 40,000,000.
- Reduce supply cap for mUSD from 100,000,000 to 50,000,000.
- Reduce borrow cap for mUSD from 50,000,000 to 25,000,000.
BTC.b (Aave V3 Core)
BTC.b has reached 99.7% supply cap utilization (19 / 20) on the Aave V3 Core instance. The reserve is configured as collateral only.
Supply Distribution
Source: LlamaRisk, July 30, 2026
The top BTC.b suppliers run health factors between 1.14 and 2.10 with a median of 1.52, and eight of the nine carry outstanding debt. Debt is denominated entirely in stablecoins, across USDe, GHO, USDT, and USDC, so the cohort holds stablecoin borrowings against BTC.b collateral whose health factor stability tracks the BTC price.
Recommendation
We recommend raising the supply cap from 20 to 40 on Aave V3 Core. The reserve sits at 99.7% cap utilization and the proposed cap lands at approximately 49.9% post-change utilization.
USDe (Aave V3 Mantle)
USDe has reached 99.8% supply cap utilization (9,982,168 / 10,000,000) and 17.0% borrow cap utilization (1,532,090 / 9,000,000) on the Aave V3 Mantle instance.
Supply Distribution
Source: LlamaRisk, July 30, 2026
Two of the top five USDe suppliers carry outstanding debt at health factors between 1.03 and 1.05, and the remainder hold the asset without offsetting borrowings. That debt is denominated in USDT0, GHO, and USDC, and USDe is usable as collateral only within the stablecoin E-Mode categories, where the tight health factor cluster reflects the high liquidation thresholds applied to correlated stablecoin pairs.
Borrow Distribution
Source: LlamaRisk, July 30, 2026
The top USDe borrowers run health factors between 1.27 and 3.81 with a median of 1.92, and all carry outstanding debt. Borrowing is drawn against WETH and FBTC collateral, so health factor stability in this cohort tracks the ETH and BTC price.
Recommendation
We recommend raising the supply cap from 10,000,000 to 20,000,000 and raising the borrow cap from 9,000,000 to 18,000,000 on Aave V3 Mantle. The supply side sits at 99.8% cap utilization and lands at approximately 49.9% post-change utilization, while the borrow side moves from 17.0% to approximately 8.5%.
cbETH (Aave V3 Base)
cbETH is currently at 89.0% supply cap utilization (44,524 / 50,000) on the Aave V3 Base instance. The reserve is configured as collateral only.
Supply Distribution
Source: LlamaRisk, July 30, 2026
All twenty of the top cbETH suppliers carry outstanding debt, with health factors between 1.02 and 12.71 and a median of 1.14. WETH is the dominant borrowed asset by a wide margin, with USDC second, and cbETH is eligible in both the ETH-correlated and the cbETH/WETH E-Mode categories, so health factor stability in the cohort tracks the cbETH versus ETH spread.
Recommendation
We recommend raising the supply cap from 50,000 to 75,000 on Aave V3 Base. The reserve sits at 89.0% cap utilization and the proposed cap lands at approximately 59.3% post-change utilization.
USDe (Aave V3 Monad)
USDe is currently at 79.7% supply cap utilization (15,939,016 / 20,000,000) and 23.2% borrow cap utilization (4,181,133 / 18,000,000) on the Aave V3 Monad instance.
Supply Distribution
Source: LlamaRisk, July 30, 2026
Supply is held by a small number of depositors, one of which carries outstanding debt at a health factor of 1.02 while the others hold the asset without offsetting borrowings. That debt is denominated in USDT0 against USDe collateral inside the stablecoin E-Mode category, where the liquidation threshold of 92% produces the compressed health factor observed.
Borrow Distribution
Source: LlamaRisk, July 30, 2026
The top USDe borrowers run health factors between 1.04 and 26.94 with a median of 1.20, and all carry outstanding debt. Collateral behind those positions is predominantly stablecoins, with USDC and USDT0 the most widely held, alongside WETH and cbBTC in a minority of positions.
Recommendation
We recommend raising the supply cap from 20,000,000 to 40,000,000 and raising the borrow cap from 18,000,000 to 36,000,000 on Aave V3 Monad. The supply side sits at 79.7% cap utilization and lands at approximately 39.9% post-change utilization, while the borrow side moves from 23.2% to approximately 11.6%.
sUSDe (Aave V3 Monad)
sUSDe is currently at 2.6% supply cap utilization (510,867 / 20,000,000) on the Aave V3 Monad instance. The reserve is configured as collateral only.
Supply Distribution
Source: LlamaRisk, July 30, 2026
All of the top sUSDe suppliers carry outstanding debt, with health factors between 1.01 and 1.05 and a median of 1.03. Debt is denominated in USDT0, USDC, AUSD, and GHO against sUSDe collateral inside the stablecoin E-Mode category, where the liquidation threshold of 92% produces the compressed health factor cluster observed.
Recommendation
We recommend raising the supply cap from 20,000,000 to 40,000,000 on Aave V3 Monad. The reserve sits at 2.6% cap utilization and the proposed cap lands at approximately 1.3% post-change utilization.
Cap Reductions
mUSD on Aave V3 Monad sits at 2.9% supply cap utilization (2,874,502 / 100,000,000) and 4.4% borrow cap utilization (2,190,136 / 50,000,000). The proposed supply cap of 50,000,000 is approximately 17.4x current outstanding supply and the proposed borrow cap of 25,000,000 is approximately 11.4x current outstanding borrow, landing at approximately 5.7% and 8.8% post-change cap utilization respectively.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Aave V3 Core | BTC.b | 20 | 40 | - | - |
| Aave V3 Mantle | USDe | 10,000,000 | 20,000,000 | 9,000,000 | 18,000,000 |
| Aave V3 Base | cbETH | 50,000 | 75,000 | 1,010 | - |
| Aave V3 Monad | USDe | 20,000,000 | 40,000,000 | 18,000,000 | 36,000,000 |
| Aave V3 Monad | sUSDe | 20,000,000 | 40,000,000 | - | - |
| Aave V3 Monad | mUSD | 100,000,000 | 50,000,000 | 50,000,000 | 25,000,000 |
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.