LlamaRisk's latest Aave V3 review found BTC.b supply at 93.3 percent of its 10-unit cap, prompting a Risk Stewards proposal to raise the limit to 20. The top suppliers show health factors between 1.14 and 2.10, with a median of 1.60, and seven of eight carry outstanding debt denominated entirely in stablecoins, principally GHO and USDC, making their health factors tightly correlated with BTC spot price.
For Armada's crypto desk, this data point is a live stress signal. Concentration is extreme: three suppliers hold 91.1 percent of BTC.b supply. If BTC sells off sharply, cascading liquidations in Aave V3 would compress on-chain liquidity precisely when Armada might need to liquidate or substitute BTC collateral. The health factor distribution should inform Armada's own LTV haircut floors for BTC, and the cap increase should be monitored as a leading indicator of institutional DeFi appetite for Bitcoin collateral.