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 Monad:
- Increase supply cap for wstETH from 4,600 to 9,200.
Aave V3 Core:
- Increase borrow cap for USDT from 2,574,000,000 to 3,090,000,000.
Aave V3 Plasma:
- Increase supply cap for PT-sUSDE-22OCT2026 from 150,000,000 to 200,000,000.
wstETH (Aave V3 Monad)
wstETH has reached 99.9% supply cap utilization (4,598 / 4,600) on the Aave V3 Monad instance.
Supply Distribution
Source: LlamaRisk, July 20, 2026
The wstETH suppliers run health factors between 1.01 and 1.14 with a median of 1.01, and all seven carry outstanding debt. Every position borrows WETH against wstETH collateral within the wstETH and WETH E-Mode category, configured at 94.0% LTV and 96.0% LT, so health factor stability tracks the wstETH to ETH exchange rate.
Recommendation
We recommend raising the supply cap from 4,600 to 9,200 on Aave V3 Monad. Supply cap utilization stands at 99.9% with approximately 2 wstETH of remaining headroom, landing at approximately 50.0% post-change. The reserve is configured as collateral-only, and the collateral is held against ETH-correlated debt in E-Mode.
USDT (Aave V3 Core)
USDT has reached 95.5% borrow cap utilization (2,457,377,890 / 2,574,000,000) on the Aave V3 Core instance.
Borrow Distribution
Source: LlamaRisk, July 20, 2026
The top twenty USDT borrowers run health factors between 1.01 and 2.17 with a median of 1.39, and all twenty carry outstanding debt. The cohort posts ETH-correlated collateral (WETH, wstETH, and weETH), BTC-correlated collateral (WBTC and cbBTC), and USDe against USDT debt, with four also borrowing USDC, so health factor stability tracks the ETH and BTC price on the volatile-collateral positions and the USDe peg on the remainder.
Recommendation
We recommend raising the borrow cap from 2,574,000,000 to 3,090,000,000 on Aave V3 Core. Borrow cap utilization stands at 95.5%, landing at approximately 79.5% post-change. The supply cap is held unchanged at 3,480,000,000, at approximately 85.7% utilization.
PT-sUSDE-22OCT2026 (Aave V3 Plasma)
PT-sUSDE-22OCT2026 has reached 93.5% supply cap utilization (140,225,675 / 150,000,000) on the Aave V3 Plasma instance.
Supply Distribution
Source: LlamaRisk, July 20, 2026
The top twenty PT-sUSDE-22OCT2026 suppliers run health factors between 1.00 and 1.96 with a median of 1.02, and all twenty carry outstanding debt. Every position borrows USDe against the PT collateral in E-Mode, configured at 90.5% LTV and 92.5% LT for the USDe category, so health factor stability tracks the PT to USDe price path into maturity.
Liquidity
Source: LlamaRisk, July 20, 2026
The Pendle AMM pool for this maturity holds USD 5.6M in total value, split USD 1.1M on the PT side (20%) and USD 4.4M on the SY side (80%), with implied APY trading in a narrow band near 4% since the pool opened in June 2026. The PT reaches maturity on October 22, 2026, at which point it becomes redeemable at par against the underlying.
Recommendation
We recommend raising the supply cap from 150,000,000 to 200,000,000 on Aave V3 Plasma. Supply cap utilization stands at 93.5%, landing at approximately 70.1% post-change and approximately 1.43x current outstanding supply. The reserve is configured as collateral-only, and the collateral is held against USDe debt in E-Mode.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Aave V3 Monad | wstETH | 4,600 | 9,200 | — | — |
| Aave V3 Core | USDT | 3,480,000,000 | — | 2,574,000,000 | 3,090,000,000 |
| Aave V3 Plasma | PT-sUSDE-22OCT2026 | 150,000,000 | 200,000,000 | — | — |
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.