LlamaRisk, acting as Aave's risk steward, has proposed supply cap increases across several Aave V3 deployments: cbBTC on Base rises from 3,200 to 4,000 BTC, WETH on Polygon from 15,000 to 20,000, and USDe on Mantle doubles to 80 million, with USDe borrow caps simultaneously cut. The PT-srUSDe-22OCT2026 supply cap on Core doubles after reaching 92.1% utilization, signaling strong institutional demand for yield-bearing stablecoin positions.
For Armada's crypto repo desk, Aave's cbBTC and WETH cap parameters serve as an external benchmark for how much leverage the market is willing to extend against Bitcoin and Ethereum collateral. An expanding cbBTC supply cap suggests rising institutional appetite for BTC-backed borrowing, which validates Armada's crypto repo offering while also increasing competitive pressure. Armada should review its own BTC and ETH LTV ceilings relative to Aave's implied risk tolerance to ensure its haircuts remain appropriately calibrated.