LlamaRisk, acting as Aave's risk steward, has recommended substantial reductions to supply and borrow caps across Aave V3 deployments on Sonic and Aptos. On Sonic, WETH borrow caps fall from 500 to 97 and USDC borrow caps drop from 4.6 million to 1.05 million, reductions of roughly 80 percent in each case, driven by on-chain liquidity analysis and position health monitoring.
For Armada's crypto repo desk, these cap reductions are meaningful DeFi benchmark data points. Aave V3 rates and caps inform how institutional counterparties perceive ETH and USDC collateral efficiency in the broader market, and sharp tightenings can signal deteriorating on-chain liquidity conditions that flow into Armada's competitive LTV and haircut benchmarking. Armada should update its internal benchmark tracking for ETH and USDC and assess whether current collateral terms remain competitive given the revised Aave parameters.