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 the borrow cap for wstETH from 14,000 to 28,000.
- Reduce the borrow cap for USDe from 700,000,000 to 100,000,000.
Aave V3 Plasma:
- Increase the supply cap for USDe from 550,000,000 to 750,000,000.
wstETH (Aave V3 Core)
wstETH sits at 99.8% borrow cap utilization on Aave V3 Core, with 13,977 borrowed against a cap of 14,000.
Borrow Distribution
Source: LlamaRisk, September 22, 2026
The top wstETH borrowers have health factors ranging from 1.00 to 4.63, with a median of 1.11 and most of the cohort below 1.16. Their collateral is predominantly weETH by value at $51M (80%), followed by WETH at $8.5M (14%). Given the close correlation among these assets, health factor stability is primarily sensitive to the relative performance of wstETH against the collateral assets, rather than broad market movements.
Recommendation
The proposed cap of 28,000 is approximately 2.00x the current outstanding borrow, resulting in approximately 49.9% post-change cap utilization.
USDe (Aave V3 Plasma)
USDe sits at 100.0% supply cap utilization on Aave V3 Plasma.
Supply Distribution
Source: LlamaRisk, September 22, 2026
The top eight suppliers include six carrying outstanding debt, at health factors between 1.01 and 1.05 with a median of 1.02, and two supplying on a spot basis. All six borrow USDT0 against USDe collateral, and three also hold sUSDe. Since USDe is priced at par with USDT, these positions have very low liquidation risk. Supply is concentrated, with the largest position holding 64.6% of the reserve and the top five holding 94.8%.
Recommendation
The proposed cap of 750,000,000 is approximately 1.36x the current outstanding supply, resulting in approximately 73.3% post-change cap utilization.
Cap Reductions
USDe on Aave V3 Core sits at 11.1% borrow cap utilization (77.9M / 700M). The proposed cap of 100,000,000 is approximately 1.28x current outstanding borrows, landing at approximately 77.9% post-change cap utilization.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap |
|---|---|---|---|
| Aave V3 Plasma | USDe | 550,000,000 | 750,000,000 |
| Instance | Asset | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|
| Aave V3 Core | wstETH | 14,000 | 28,000 |
| Aave V3 Core | USDe | 700,000,000 | 100,000,000 |
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.