LlamaRisk proposes cap changes across Aave V3 and V4

LlamaRisk has filed another set of risk-parameter changes for Aave, this time targeting four assets across four V3 deployments. The Aave Governance Forum proposal, published November 15, recommends higher supply caps for wstETH, mUSD and AAVE, plus a higher borrow cap for EURe.

On Aave V3 Core, the proposed wstETH supply cap rises from 850,000 to 900,000, a 50,000-unit increase, or 5.9% of the existing cap. On Aave V3 Monad, the mUSD supply cap would move from 50,000,000 to 75,000,000, with the borrow cap going from 40,000,000 to 50,000,000.

The remaining V3 changes affect AAVE and EURe. Aave V3 Arbitrum’s AAVE supply cap would nearly double, from 10,400 to 20,000. Aave V3 Gnosis’s EURe borrow cap would move from 10,600,000 to 12,000,000.

LlamaRisk’s stated basis, per the governance material, is observed user behavior, on-chain liquidity and position health. The risk service provider, funded in part by the Aave DAO, frames these updates as keeping supply and borrow caps responsive to market conditions and protocol health.

The November 15 proposal sits two days behind a broader November 13 package. That earlier filing recommended reducing caps for weETH, WBTC, BTC.b and eBTC on Aave V3 Core, and for USDT0, sUSDe and USDe on Aave V3 Mantle. The same two-day window therefore holds both added capacity and reduced limits, asset by asset — not a single protocol-wide direction. Full details are in the November 13 Aave governance proposal.

Aave V4 was part of that November 13 round as well. On the Ethereum Core Hub Main Spoke, LlamaRisk proposed raising add caps for wstETH from 30,000 to 40,000, weETH from 25,000 to 35,000, and USDC$0.9997▲0.01% from 75,000,000 to 85,000,000. The USDC draw cap would rise from 50,000,000 to 60,000,000. On the Ethereum Core Hub Bluechip Spoke, the EURC draw cap would double from 300,000 to 600,000.

The same V4 proposal raises the USDT$0.9996▲0.01% add cap on the Avalanche Core Hub Main Spoke from 110,000,000 to 150,000,000. On the Avalanche Core Hub Ethena Ecosystem Spoke, the USDt draw cap would move from 100,000,000 to 140,000,000, while the USDe add cap would rise from 120,000,000 to 150,000,000. Those figures are in the V4 cap-increase proposal.

All of this follows an October 30 proposal that sought to remove approximately $3.7 billion of unused borrowing capacity on Aave V3 and roughly $130 million on V4, according to TechFlow Post. In the desk’s reading, the sequence is not evidence of a protocol-wide easing: it combines added capacity in some markets with reductions in others.