Risk Stewards: Cap and IRM Changes on Aave V3 / 2026.09.18

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 Core: Increase the borrow cap for wstETH from 7,000 to 14,000. Aave V3 Base: Decrease Slope1 for WETH from 2.50% to 2.30%. Increase the optimal utilization for WETH from 90.00% to 92.00%. Aave V3 Mantle: Increase the supply cap for USDe from 20,000,000 to 40,000,000. Aave V3 X Layer: Increase Slope1 for USDC from 4.00% to 4.50%. Aave V3 Horizon: Increase the supply cap for USCC from 5,600,000 to 7,500,000. wstETH (Aave V3 Core) wstETH sits at 99.4% borrow cap utilization on Aave V3 Core, with 6,956 borrowed against a cap of 7,000. Borrow Distribution Source: LlamaRisk, September 18, 2026 The top wstETH borrowers have health factors between 1.00 and 4.17, with a median of 1.12, and most of the cohort is clustered below 1.15. The collateral backing the wstETH debt is predominantly weETH, and WETH rather than stablecoins, so the health factor’s stability tracks the wstETH-versus-ETH spread within a single correlated asset family. Recommendation The proposed cap of 14,000 is approximately 2.01x the current outstanding borrow, resulting in approximately 49.7% post-change cap utilization. WETH (Aave V3 Base) The proposed change lowers Slope1 to 2.30% and raises the optimal utilization to 92.00%, implementing the Risk Stewards September 2026 WETH interest rate adjustment on Base, as published by TokenLogic. The base rate and Slope2 are unchanged. At the current 82.4% utilization, the post-change variable borrow rate would be 2.06% APR, down from 2.29% under the current IRM. Source: LlamaRisk, September 18, 2026 Withdrawal Liquidity at the Optimal Point The optimal point sets how much of the supply remains available for withdrawal when the reserve is at its intended operating level. Moving it up by two percentage points converts exit liquidity into borrow capacity. Instance Asset Supplied Borrowed Utilization Idle Liquidity Aave V3 Base WETH 84,792 69,886 82.4% 14,906 Instance Asset Buffer at Optimal (current) Buffer at Optimal (new) Change Borrow Headroom to Optimal (current) Borrow Headroom to Optimal (new) Aave V3 Base WETH 8,479 6,783 -1,696 6,426 8,122 The change adds 1,696 WETH of borrow capacity before Slope2 engages, raising the headroom to the optimal point from 6,426 to 8,122 WETH and reducing the withdrawal buffer by the same amount. The reserve currently operates 9.6% below the new optimal point, and the present idle liquidity of 14,906 WETH is 2.2x the post-change buffer at the optimal point. USDe (Aave V3 Mantle) USDe sits at 96.6% supply cap utilization on Aave V3 Mantle, with 19.3M supplied against a cap of 20M. Supply Distribution Source: LlamaRisk, September 18, 2026 The supplier base is concentrated, with the largest position holding approximately 68.6% of supply and the top three positions holding approximately 99.6% of supply. Three of the four top suppliers carry debt at health factors between 1.03 and 1.04, posting USDe alongside sUSDe as collateral under the Mantle stablecoin E-Mode categories and borrowing USDT0 against it. Given that USDe on Aave is priced via the USDT/USD feed, these positions are correlated, reducing the liquidation risk. Recommendation The proposed cap of 40,000,000 is approximately 2.07x the current outstanding supply, resulting in approximately 48.3% post-change cap utilization. USDC (Aave V3 X Layer) The proposed change raises Slope1 to 4.50%. Optimal utilization, the base rate, and Slope2 are unchanged, so the rate at the optimal point moves from 4.00% to 4.50% APR, and the rate at full utilization moves from 44.00% to 44.50% APR. At the current 1.0% utilization, the post-change variable borrow rate would be 0.05% APR, up from 0.04% under the current IRM. The reserve stands at 102 USDC supplied against 1 USDC borrowed, so the change applies to a reserve with no material outstanding position. USCC (Aave V3 Horizon) USCC, the Superstate Crypto Carry Fund token, sits at 92.0% supply cap utilization on Aave V3 Horizon, with 5,149,882 supplied against a cap of 5,600,000. Supply Distribution Source: LlamaRisk, September 18, 2026 The supplier base is concentrated: the largest position holds approximately 59.6% of supply, the top three hold approximately 78.6%, and every top supplier carries debt with a health factor between 1.04 and 1.11, with a median of 1.06. The debt is entirely stablecoin, approximately 46.5M in RLUSD and approximately 9.6M in GHO, so health factor stability tracks the USCC price. Recommendation The proposed cap of 7,500,000 is approximately 1.46x the current outstanding supply, resulting in approximately 68.7% post-change cap utilization. Specification Caps Instance Asset Current Supply Cap Recommended Supply Cap Aave V3 Mantle USDe 20,000,000 40,000,000 Aave V3 Horizon USCC 5,600,000 7,500,000 Instance Asset Current Borrow Cap Recommended Borrow Cap Aave V3 Core wstETH 7,000 14,000 IRM Instance Asset Current Slope1 Recommended Slope1 Aave V3 Base WETH 2.50% 2.30% Aave V3 X Layer USDC 4.00% 4.50% Instance Asset Current Optimal Usage Ratio Recommended Optimal Usage Ratio Aave V3 Base WETH 90.00% 92.00% Next Steps We will move forward and implement these updates via the Risk Steward process. The implemented changes can be reviewed on the LlamaRisk Risk Stewards Dashboard. 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