Risk Stewards: Supply and Borrow Cap Reductions on Aave V3 / 2026.07.10

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 MegaETH: Reduce supply cap for USDm from 1,000,000,000 to 300,000,000. Reduce borrow cap for USDm from 600,000,000 to 182,000,000. Reduce supply cap for USDe from 800,000,000 to 123,000,000. Reduce borrow cap for USDe from 40,000,000 to 30,000,000. Cap Reductions The following reserves carry supply and borrow ceilings well above current demand, and the proposed caps right-size that headroom. USDm on Aave V3 MegaETH sits at 19.8% supply cap utilization (197,986,853 / 1,000,000,000) and 18.3% borrow cap utilization (109,528,980 / 600,000,000). The proposed caps of 300,000,000 supply and 182,000,000 borrow land at approximately 66.0% and 60.2% post-change cap utilization. USDe on Aave V3 MegaETH sits at 10.2% supply cap utilization (81,442,387 / 800,000,000) and 24.1% borrow cap utilization (9,633,998 / 40,000,000). The proposed caps of 123,000,000 supply and 30,000,000 borrow land at approximately 66.2% and 32.1% post-change cap utilization. Specification Instance Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap Aave V3 MegaETH USDm 1,000,000,000 300,000,000 600,000,000 182,000,000 Aave V3 MegaETH USDe 800,000,000 123,000,000 40,000,000 30,000,000 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. 1 post - 1 participant Read full topic