[ARFC] Aave v3 Polygon wMATIC Interest Rate Update

The proposed interest rate at the optimal point is lower than the current APR of stMATIC (6.3%). As such, Gauntlet has the following concerns regarding wMATIC lending pools:

  • Lending Pool utilization above the optimal point will lead to more volatile interest rates. The user experience on Aave could be negatively impacted if interest rates are volatile to small changes in pool utilizations.
  • High utilization might prevent suppliers from withdrawing collateral and increase the risk of failed atomic liquidations.

In consideration of the above factors, Gauntlet recommends changing the slope 1 rate to 6.5% to set utilization below the optimal point.