Aave proposal would lift USDC borrow cap and USDe supply cap

LlamaRisk published a recommendation on the Aave Governance Forum on November 8 to raise the USDC$0.9996▼0.01% borrow cap and the USDe supply cap on Aave V3 Core, citing near-full utilization and observed user behavior.

For USDC, the proposed change is a $150 million increase — from $2.6 billion to $2.75 billion, a 5.8% lift. The governance recommendation records USDC borrow-cap utilization at 99.0%, meaning $2.57 billion is already drawn against the existing $2.6 billion ceiling. Using the post’s rounded $2.57 billion debt figure, 2.57/2.75 equals 93.5%; LlamaRisk reports approximately 93.6%, presumably using a less-rounded balance. If implemented, the recommendation would give USDC borrowers up to $150 million more borrowing headroom; the post does not state when the change would be executed.

USDe’s adjustment is proportionally larger. LlamaRisk recommends moving its supply cap from $550 million to $750 million. USDe has hit 100.0% supply-cap utilization — all $550 million of capacity is consumed. At the current supply level, 550 divided by 750 comes to approximately 73.3%, and implementation would create up to $200 million of additional supply capacity, conditional on that implementation occurring. The fact sheet provides no prior comparable Aave cap change for a historical comparison.

The top 20 suppliers hold about 99% of total supply; the single largest accounts for approximately 61%, and the top five together account for about 91%. Eighteen of those 20 suppliers carry debt, with health factors running from 1.02 to 2.30. The 1.03 median health factor suggests limited liquidation buffer, in the desk’s assessment, although the post does not disclose outcomes for any specific account.

USDC borrowing is concentrated too, though less dramatically. The top 20 USDC borrowers carry health factors between 1.02 and 3.07, with a median of 1.76, and the largest single borrower represents about 14% of outstanding debt. In this article’s assessment, these figures represent the central trade-off: higher caps relieve demand pressure, while a meaningful portion of outstanding positions sits close to liquidation thresholds.

The recommendation described here covers USDC and USDe; it does not specify changes to other assets. As unrelated market context, CoinGecko listed LINK at $10.76, down 0.5% over 24 hours at the time of publication.