Aave MegaETH USDe supply cap is the primary keyword for this Radar update. LlamaRisk posted on May 9 that USDe on Aave V3 MegaETH had reached 99.5% supply-cap utilization and recommended raising the cap from 400 million to 800 million.
Radar is publishing it because cap changes are protocol operations with real discovery value. They show where demand is concentrating, how quickly a market absorbs capacity and how risk stewards react when a loop becomes crowded.
What Happened
The Aave forum post says USDe reached 398,103,284 supplied against a 400,000,000 cap on the Aave V3 MegaETH instance. It also says the reserve refilled to near its ceiling within three days of the prior increase from 200,000,000 to 400,000,000.
LlamaRisk recommended raising the USDe supply cap to 800,000,000 while leaving the USDm borrow cap unchanged at 40,000,000. A later May 9 reply on the same thread says the change had been executed.
Why It Matters
The change matters because fast utilization can be healthy demand, crowded leverage or both. The post describes a stable-stable loop where top USDe suppliers hold collateral against USDm debt in E-Mode, with concentrated supply and health factors near the low end of the range.
For protocol researchers, the signal is not simply that a cap doubled. It is that risk stewards accepted more constrained exposure after reviewing peg correlation, utilization, position concentration and borrow-side limits.
What To Watch Next
Watch whether the new 800 million cap fills as quickly as the prior one. If it does, the next governance question may become borrow-cap capacity, loop concentration and whether incentives are creating durable usage or short-term leverage.
Researchers should also watch peg behavior between USDe and USDm. Stable-stable loops can look calm until correlation breaks, so cap growth should be read alongside oracle, liquidity and liquidation assumptions.
The useful follow-up is not only another cap vote. It is whether deposits diversify across wallets and whether liquidators would still have a workable path if the loop unwinds during a volatile MegaETH session.
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