Aave reviews new V3 and V4 risk caps without presenting them as already implemented

Recommendations are distinct from implementation

LlamaRisk published two analyses on November 3, 2026 proposing changes to several Aave V3 and V4 risk parameters. The documents rely on cap utilization, available liquidity and position health observed that day. They announce that the proposals will move through the Risk Steward process, but they do not by themselves prove that the changes are already active. This distinction matters: a recommendation describes the next intervention under consideration, while an execution dashboard must confirm the state actually applied to each market.

On Aave V3 X Layer, the USD₮0 borrow cap would rise from 35 to 70 million, while 25.38 million was in use, or 72.5% of the current cap. On Avalanche V3, the WAVAX supply cap would instead fall from 14 to 12 million. Outstanding supply was about 16.23 million, above the existing cap. Setting a threshold below current supply does not remove existing deposits; it prevents new supply until the total falls below the limit.

Ethereum combines caps and rate parameters

For Aave V4 on Ethereum, the analysis recommends raising the USDC draw cap on the Core Hub Main Spoke from 36 to 40 million. Utilization stood at 95.1%, with 34.25 million drawn. The USDC slope1 parameter would increase from 5% to 5.5% on the Core Hub, but decrease from 5% to 4.5% on the Prime Hub. These opposite directions reflect different liquidity conditions and should not be summarized as a general increase in Aave rates.

Other Ethereum V4 limits would also rise: the USDT draw cap from 15.6 to 20 million, the WETH cap on the EtherFi Spoke from 41,100 to 45,000, and the weETH add cap from 22,000 to 25,000. The analysis also highlights concentration in some positions. For WETH, the largest borrower represented about 41% of the amount drawn and the top twenty nearly 97%, with health factors often close to 1.

Avalanche carries the largest proposed increases

On Avalanche V4, the USDt add cap on the Main Spoke would rise from 60 to 110 million. The USDt draw cap in the Ethena Ecosystem Spoke would double from 50 to 100 million, while the USDe add cap would rise from 60 to 120 million and the WAVAX add cap from 2 to 4 million. The proposed amounts expand capacity, but the analysis reports high concentration: one supplier represented about 87% of Main Spoke USDt, and two positions accounted for almost all USDe in the Ethena segment.

These recommendations show Aave adjusting limits to activity in each market rather than applying one uniform rule. They guarantee neither immediate execution nor lasting additional availability, because actual liquidity can become binding before a theoretical cap is reached. The useful next check is therefore to compare each proposal with the Risk Stewards dashboard and execution transactions. Until that evidence is available, the figures should remain described as parameters recommended on November 3, not as changes that have definitively been applied.