Risk Stewards: USDe Supply Cap Increase on Aave V3 MegaETH / 2026.05.03

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: Increase supply cap for USDe from 100,000,000 to 200,000,000. USDe (Aave V3 MegaETH) USDe has reached 100.0% supply cap utilization (100,000,000 / 100,000,000) on the Aave V3 MegaETH instance. The reserve refilled to its ceiling within the day following the prior cap raise, indicating sustained demand on this market. Supply Distribution Source: LlamaRisk, May 3, 2026 The dominant usage pattern is a leveraged stable-stable loop: USDe collateral against USDm debt under the stablecoin E-Mode. Health factors among active borrowers cluster between 1.03 and 1.05, with a smaller cohort of passive depositors holding USDe on a spot basis (HF infinite) and a thin tail of more conservatively leveraged positions in the 1.13 to 1.72 range. The tight HF cluster reflects capital-efficient looping where collateral and debt are both USD-pegged stablecoins, so liquidation risk is contained by the correlation between the two legs and by the narrow E-Mode liquidation bonus. Recommendation Given full cap utilization on the back of a same-week refill, the structurally low liquidation risk of the correlated stablecoin loop, and the sustained demand observed on the MegaETH instance, we recommend doubling the USDe supply cap from 100,000,000 to 200,000,000. The borrow cap remains unchanged at 40,000,000, in line with the negligible borrow utilization on the reserve. Specification Instance Asset Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap Aave V3 MegaETH USDe 100,000,000 200,000,000 unchanged (40,000,000) unchanged (40,000,000) 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