- LlamaRisk proposed raising Aave V3 Core’s USDC borrow cap from 2.6 billion to 2.75 billion after the market reached 99.0% utilization
- A separate change would raise the USDe supply cap from 550 million to 750 million after that market hit 100% utilization
- The top 20 borrowers in the USDC market carry health factors ranging from 1.02 to 3.07, while the top five suppliers in the USDe market hold about 91% of total supply
Aave’s risk manager LlamaRisk posted a proposal to the protocol’s governance forum on November 8, 2026 recommending capacity increases on two of the protocol’s largest and most heavily utilized markets, both of which had reached or neared their existing ceilings. The post frames both changes as a response to real, measured demand pressing against current limits rather than a speculative or precautionary adjustment.
The first proposed change targets USDC borrowing on Aave V3’s Core deployment, where the existing borrow cap of 2.6 billion had reached 99.0% utilization, leaving very little headroom for additional borrowing before the market would effectively be full. LlamaRisk recommends raising that cap to 2.75 billion, a modest but meaningful expansion designed to relieve the immediate capacity constraint. The proposal notes that the top 20 borrowers in this market carry health factors ranging from 1.02, uncomfortably close to the liquidation threshold, up to a far more comfortable 3.07, illustrating a wide spread in how much buffer different large borrowers are currently operating with against potential price swings.
The second change addresses USDe, a synthetic dollar asset, where the supply cap had already been fully utilized at 100%, meaning no additional USDe could be newly supplied into the market under the existing limit. LlamaRisk proposes raising that cap from 550 million to 750 million, a roughly 36% increase. The post also discloses that supply in this market is notably concentrated, with the top 20 suppliers holding approximately 99% of total supply and the top five alone accounting for roughly 91%, a concentration level that means the market’s behavior is disproportionately influenced by the decisions of a small number of large holders.
Both changes follow Aave’s standard Risk Steward process, which allows approved risk managers to make incremental parameter adjustments within pre-agreed bounds without requiring a full DAO-wide governance vote for each individual change, letting the protocol respond relatively quickly once a market shows signs of hitting its existing capacity.
Raising caps specifically on markets that have reached full or near-full utilization is one of the most routine forms of DeFi risk management, reflecting organic growth in user demand rather than any underlying security concern. The full proposal is posted on Aave’s own governance forum.
Disclaimer: Cryip's content is strictly for educational and informational purposes and does not constitute financial, legal, or investment advice. Cryptocurrency involves significant risk, and readers assume full responsibility for their own financial decisions. Asset references are never endorsements.
To make complex crypto topics accessible to readers at all experience levels, our team uses AI tools strictly to refine language, correct grammar, and simplify terminology. AI is never used to draft facts, source information, or form conclusions. Every article is fact-checked and approved by a human editor before publication. Read our full AI Use & Content Policy.
