LlamaRisk has recommended and Aave V3 Risk Stewards are implementing supply cap increases for USDtb from $250M to $302M and USDT from $2.6B to $2.9B following near-capacity utilization. Notably, USDtb supply on Aave is highly concentrated, with a single Ethena-controlled wallet supplying roughly 87% of the total and the top three wallets accounting for 97%.
For Armada's crypto desk, Aave V3 supply cap parameters and utilization levels serve as a key external benchmark for setting LTV ratios and haircuts on stablecoin collateral. The extreme concentration of USDtb supply in Ethena-linked wallets represents a counterparty concentration risk that should be factored into any position accepting USDtb as collateral, and warrants a specific flag in Armada's collateral policy review.