Risk Stewards: Supply and Borrow Cap Reductions on Aave V3 / 2026.07.23

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 Mantle: Reduce supply cap for USDe from 30,000,000 to 10,000,000. Reduce borrow cap for USDe from 27,000,000 to 9,000,000. Reduce supply cap for sUSDe from 158,600,000 to 125,000,000. Aave V3 MegaETH: Reduce supply cap for USDe from 123,000,000 to 10,000,000. Reduce borrow cap for USDe from 30,000,000 to 9,000,000. Reduce supply cap for USDm from 300,000,000 to 25,000,000. Reduce borrow cap for USDm from 182,000,000 to 22,500,000. Reduce supply cap for USDT0 from 50,000,000 to 10,000,000. Reduce borrow cap for USDT0 from 46,000,000 to 9,000,000. Reduce supply cap for WETH from 50,000 to 5,200. Reduce borrow cap for WETH from 46,000 to 4,680. Reduce supply cap for wstETH from 18,000 to 4,190. Reduce supply cap for BTC.b from 180 to 152. Cap Reductions The following reserves have supply caps well above current utilization. The Ethena reserves on Aave V3 Mantle have declined in supplied balance over recent weeks, and the Aave V3 MegaETH reserves reflect the withdrawal of a large supplied position. Secondary-market liquidity for these assets has also thinned, which further supports tightening the caps toward current demand. The proposed caps remove idle headroom while retaining room above current balances. USDe on Aave V3 Mantle sits at 2.2% supply cap utilization (668,402 / 30,000,000). The proposed supply cap of 10,000,000 is approximately 15x current outstanding supply, and the borrow cap tightens from 27,000,000 to 9,000,000 against 546,884 currently borrowed. sUSDe on Aave V3 Mantle sits at 55.4% supply cap utilization (87,921,423 / 158,600,000). The proposed cap of 125,000,000 is approximately 1.4x current outstanding supply, landing at approximately 70% post-change cap utilization. USDe on Aave V3 MegaETH sits at 0.7% supply cap utilization (884,194 / 123,000,000). The proposed supply cap of 10,000,000 is approximately 11x current outstanding supply, and the borrow cap tightens from 30,000,000 to 9,000,000 against 874,954 currently borrowed. USDm on Aave V3 MegaETH sits at 2.4% supply cap utilization (7,071,857 / 300,000,000). The proposed supply cap of 25,000,000 is approximately 3.5x current outstanding supply at approximately 28% post-change utilization, and the borrow cap tightens from 182,000,000 to 22,500,000, held at 0.9x the supply cap. USDT0 on Aave V3 MegaETH holds a negligible supplied balance (3,839 / 50,000,000). The proposed supply cap of 10,000,000 and borrow cap of 9,000,000 remove the unused ceiling while keeping the reserve open at a level consistent with the other MegaETH reserves. WETH on Aave V3 MegaETH holds 200 of a 50,000 supply cap. The proposed supply cap of 5,200 and borrow cap of 4,680 remove unused headroom, with borrowing disabled on the reserve. wstETH on Aave V3 MegaETH sits at 2.6% supply cap utilization (463 / 18,000). The proposed cap of 4,190 removes unused headroom while retaining room above current balances. BTC.b on Aave V3 MegaETH sits at 12.6% supply cap utilization (22 / 180). The proposed cap of 152 is approximately 6.7x current outstanding supply. Specification Instance Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap Aave V3 Mantle USDe 30,000,000 10,000,000 27,000,000 9,000,000 Aave V3 Mantle sUSDe 158,600,000 125,000,000 — — Aave V3 MegaETH USDe 123,000,000 10,000,000 30,000,000 9,000,000 Aave V3 MegaETH USDm 300,000,000 25,000,000 182,000,000 22,500,000 Aave V3 MegaETH USDT0 50,000,000 10,000,000 46,000,000 9,000,000 Aave V3 MegaETH WETH 50,000 5,200 46,000 4,680 Aave V3 MegaETH wstETH 18,000 4,190 — — Aave V3 MegaETH BTC.b 180 152 — — 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. 1 post - 1 participant Read full topic