[ARFC] Supply Cap - stMATIC Polygon

title: [ARFC] Supply Cap - stMATIC Polygon
author: @TokenLogic
created: 2023-08-07


This publication proposes increasing the stMATIC Supply Cap on Polygon from 40.0M to 57M units. This is equivalent to 75% of supply on the Polygon network.


Demand for stMATIC continue to steadily grow over time and this proposal seeks to increase the Supply Cap, enabling Aave to continue growing TVL through stMATIC deposits and revenue from users who borrow wMATIC.

The utilisation of the stMATIC reserve has reached 94.31% and this publication proposes increasing the SupplyCap by a further 42.54% to 57M units.

The Polygon Foundation is currently providing stMATIC and MaticX rewards to users who borrow wMATIC. This supplements the borrow costs of wMATIC and enhances the yield on the yield maximising strategy.

Outside of Aave Protocol, incentives are provided at the strategy level with a number of integrations being advanced by other teams built on top of Aave using stMATIC as a yield source.


The following risk parameters changes are presented:


Ticker: stMATIC

Contract: 0x3a58a54c066fdc0f2d55fc9c89f0415c92ebf3c4

Parameter Current Value Proposed Value
SupplyCap 40,000,000M units 57,000,000 units

This is equivalent to 75% of stMATIC supply on Polygon.


Copyright and related rights waived via CC0.

Our LST methodology does not support increases in supply cap beyond 50% circulating supply until the killswitch is implemented. In the meantime, if the community would like to raise the stMATIC supply cap, it should go through AIP rather than risk steward.

Utilizing our LSD supply cap methodology , and given the Community Preference for Supply Cap Limits for LSTs, we support the proposed increase to the stMATIC supply cap.