Aave's Risk Stewards have approved significant cap reductions across USDm and USDe on the V3 MegaETH instance, cutting USDm supply cap from 1 billion to 300 million and borrow cap from 600 million to 182 million, while slashing USDe supply cap from 800 million to 123 million. Utilization rates of under 20% for both assets drove the decision, reflecting a right-sizing of headroom to match actual market demand rather than aspirational capacity.
For Armada's crypto repo desk, falling DeFi utilization of USDm and USDe is a liquidity signal. Thin on-chain borrow demand means these assets have limited secondary market depth, which would complicate collateral liquidation in a repo default scenario. Armada's no-rehypothecation policy means collateral must remain liquid for potential seizure, making DeFi utilization metrics a useful real-time proxy for the marketability of stablecoin collateral candidates.