LlamaRisk has proposed a series of supply-cap and borrow-cap reductions for selected Aave V3 reserves across four networks: Plasma, Mantle, Avalanche and Arbitrum. The recommendations follow a review of reserve conditions that the risk provider said considered user behavior, on-chain liquidity and the health of existing positions.
According to the proposal, the affected reserves currently have more headroom than demand requires. LlamaRisk said each revised cap would still leave room for growth above current outstanding balances while tightening risk limits where utilization does not justify the existing settings.
Largest proposed change on Plasma
The biggest adjustment in the package is on Aave V3 Plasma, where LlamaRisk recommended cutting the supply cap for sUSDe to 225 million from 450 million. On the same market, it also proposed reducing the USDe supply cap to 375 million from 475 million and lowering the USDe borrow cap to 335 million from 425 million.
The proposal frames these changes as a response to observed usage patterns rather than a sign of immediate stress. The stated rationale is that current caps on these reserves leave excess capacity relative to present demand, even after accounting for expected growth.
Mantle and Avalanche adjustments
On Aave V3 Mantle, LlamaRisk proposed a single change: lowering the sUSDe supply cap from 125 million to 75 million.
For Aave V3 Avalanche, the proposal targets both BTC.b and WETH.e. The BTC.b supply cap would fall to 1,700 from 2,200. WETH.e would see its supply cap reduced to 15,000 from 20,000, while its borrow cap would be cut to 13,500 from 18,000.
Arbitrum WETH and weETH also affected
Aave V3 Arbitrum would also face lower limits under the recommendation. LlamaRisk proposed reducing the WETH supply cap to 150,000 from 240,000 and cutting the WETH borrow cap to 135,000 from 215,000.
The weETH supply cap on Arbitrum is also set for a reduction, to 45,000 from 59,000. As with the other markets in the review, the argument is that the existing settings exceed what current reserve demand appears to require.
Implementation path through Risk Steward
LlamaRisk said the updates are expected to move ahead through the Risk Steward process, which is the next confirmed step outlined in the proposal.
No other parameter changes were listed in the post. For now, the proposal is limited to the cap reductions described across the four Aave V3 deployments, with the stated basis remaining user behavior, on-chain liquidity and position health observed in the latest reserve review.
Source: governance.aave.com