I’m a bit confused by this post.
While stMATIC shares similarities with MaticX as an LSD in terms of its calculated price feed, it is presently being utilized on Aave as collateral to borrow stablecoins rather than being leveraged for the underlying asset (MATIC).
Why is this a problem? When using stMATIC as collateral to borrow anything non-matic-correlated you will not be in eMode so the 65% lt applies. So with 10% LB(quite huge) the protocol would accumutable bad debt once the price of MATIC would suddenly fall by more then 25% before liquidators kick in - do i read this right?
Does this mean you consider the 65% outside of eMode as “to risky” in regards to MATIC price volatility?
How does:
As discussed in a separate thread, a potential solution that will allow more aggressive caps would be incorporating distinct supply caps for E-Mode categories.
relate here? The case you highlight here is outside of eMode as i understand your point.
I don’t have an opinion on the cap, just trying to understand the reasoning, so how would eMode specific caps help in that case?