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 wstETH from 850,000 to 900,000.
Aave V3 Monad:
- Increase supply cap for mUSD from 50,000,000 to 75,000,000.
- Increase borrow cap for mUSD from 40,000,000 to 50,000,000.
Aave V3 Arbitrum:
- Increase supply cap for AAVE from 10,400 to 20,000.
Aave V3 Gnosis:
- Increase borrow cap for EURe from 10,600,000 to 12,000,000.
wstETH (Aave V3 Core)
wstETH has reached 98.9% supply cap utilization on the Aave V3 Core instance.
Supply Distribution
Source: LlamaRisk, November 15, 2026
19 of the top 20 wstETH suppliers carry debt, with health factors between 1.03 and 10.58 and a median of 1.92, and supply is moderately concentrated, with the largest supplier at about 14% and the top 5 at about 37%. 16 of the 20 borrow USDT and 9 borrow USDC, so HF for most of the cohort tracks the ETH price, while the 3 WETH borrowers hold the largest debt by value against ETH-correlated collateral.
Recommendation
We recommend raising the supply cap from 850,000 to 900,000 on Aave V3 Core, which places the reserve at approximately 93.4% post-change supply cap utilization.
mUSD (Aave V3 Monad)
mUSD has reached 99.8% supply cap utilization and 84.4% borrow cap utilization on the Aave V3 Monad instance. Supply is highly concentrated, with the largest supplier (mUSD Vault) holding about 99.8% of mUSD supplied.
Borrow Distribution
Source: LlamaRisk, November 15, 2026
The top 20 mUSD borrowers run health factors between 1.00 and 1.12 with a median of 1.03, and the largest borrower accounts for about 34% of mUSD debt. 14 hold syrupUSDC and 6 hold PT-AUSD-17DEC2026 as collateral against stablecoin debt, so HF in the cohort depends on the exchange rate of these yield-bearing stablecoin collaterals against the borrowed stablecoins.
Recommendation
We recommend raising the supply cap from 50,000,000 to 75,000,000 and the borrow cap from 40,000,000 to 50,000,000 on Aave V3 Monad, which places the reserve at approximately 66.6% post-change supply cap utilization and 67.5% borrow cap utilization.
AAVE (Aave V3 Arbitrum)
AAVE has reached 100.0% supply cap utilization on the Aave V3 Arbitrum instance.
Supply Distribution
Source: LlamaRisk, November 15, 2026
14 of the 17 largest AAVE suppliers carry debt, with health factors between 1.29 and 3.38 and a median of 2.00, and supply is dispersed, with the largest supplier at about 7% and the top 5 at about 24%. 11 borrow USDC and 3 borrow USD₮0, and several also hold WETH or WBTC alongside AAVE as collateral.
Liquidity
Users can swap 1.8K AAVE for $172K USDC within a price impact of 10%.
Recommendation
We recommend raising the supply cap from 10,400 to 20,000 ($2.1M) on Aave V3 Arbitrum, which places the reserve at approximately 52.0% post-change supply cap utilization.
EURe (Aave V3 Gnosis)
EURe has reached 96.7% borrow cap utilization on the Aave V3 Gnosis instance.
Borrow Distribution
Source: LlamaRisk, November 15, 2026
The top 20 EURe borrowers run health factors between 1.06 and 4.01 with a median of 1.29, and the largest borrower accounts for about 69% of EURe debt. 11 borrow against sDAI collateral, so their HF tracks the EUR/USD exchange rate, while the largest borrower holds wstETH and GNO collateral, so its HF tracks the ETH and GNO prices.
Recommendation
We recommend raising the borrow cap from 10,600,000 to 12,000,000 on Aave V3 Gnosis, which places the reserve at approximately 85.4% post-change borrow cap utilization.
Specification
Supply Caps
| Instance | Asset | Current Supply Cap | Recommended Supply Cap |
|---|---|---|---|
| Aave V3 Core | wstETH | 850,000 | 900,000 |
| Aave V3 Monad | mUSD | 50,000,000 | 75,000,000 |
| Aave V3 Arbitrum | AAVE | 10,400 | 20,000 |
Borrow Caps
| Instance | Asset | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|
| Aave V3 Monad | mUSD | 40,000,000 | 50,000,000 |
| Aave V3 Gnosis | EURe | 10,600,000 | 12,000,000 |
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.