Aave

Current parameters:

Supply cap: 20M sUSD → 35m sUSD (proposed increase of supply cap)

DEX Liquidity: ~$50m+

Normal mode:

LTV: 60%

Liquidation threshold: 75%

Liquidation penalty: 5%

E-mode:

Assets: Stablecoins

Max LTV: 97%

Proposal: Increase of supply cap by 75% to 35m sUSD

The current sUSD supply cap on v3 is 20m sUSD and may be reached as the market is already ~70% full. To ensure that this cap isn’t hit and supply rates drastically increase, it is crucial to increase the cap before then.

The proposal’s goal is to suggest an increase of 75% to 35m sUSD supply cap via the fast-track process as outlined here

Reasons for increase:

sUSD Dex Liquidity: Despite market conditions, sUSD DEX liquidity vastly increased across Optimism on Curve, Uniswap, Velodrome, and others. This can facilitate healthy liquidations if ever necessary.

sUSD’s Healthy Peg: Throughout the entire time sUSD has been an asset on AAVE, it has held peg and has not decreased within 1% of the expected peg of $1. This is due to increased sUSD Dex liquidity, and constant arbitrage of the peg by market makers.

Optimism Liquidity Mining: Due to the ongoing OP liquidity mining program on AAVE V3, the sUSD supply cap has been hit very quickly. To ensure that more users are able to supply/borrow on AAVE, it is important to increase this supply cap to ensure that there is ample amounts of sUSD available on AAVE.

Note: We’ve used the template set by sAVAX when they’ve increased their supply cap via Fast-Track as well and have used the prior increase for sUSD as a template.