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 USDe from 100,000,000 to 120,000,000.
USDe (Aave V3 Monad)
USDe has reached 100.0% supply cap utilization (100,003,558 / 100,000,000) on the Aave V3 Monad instance. The reserve is not usable as collateral in normal mode and is enabled as collateral only within the stablecoin E-Mode category, at LTV 90.0% and LT 92.0%.
Supply Distribution
Source: LlamaRisk, August 25, 2026
The top twenty USDe suppliers run health factors between 1.01 and 1.51 with a median of 1.02, and 18 of the 20 carry outstanding debt. Fourteen borrow USDC and two borrow USDT0 against USDe collateral inside the stablecoin E-Mode category, so the cohort holds dollar-denominated debt against dollar-denominated collateral.
Recommendation
Given sustained full cap utilization and the correlated stablecoin collateral and debt profile, we recommend increasing the supply cap from 100,000,000 to 120,000,000 on Aave V3 Monad. The proposed cap is approximately 1.20x current outstanding supply, landing at approximately 83.3% post-change cap utilization. Supply is concentrated, with the largest supplier holding 37.6% of the reserve and the top five holding 86.4%. The borrow cap is held unchanged at 36,000,000.
Specification
| Instance | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Aave V3 Monad | USDe | 100,000,000 | 120,000,000 | 36,000,000 | — |
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.