# \[ARFC\] Supply Cap - stMATIC Polygon

**URL:** <https://governance.aave.com/t/arfc-supply-cap-stmatic-polygon/14355>\
**Category:** General\
**Created:** [August 7, 2023, 8:39am UTC](https://governance.aave.com/t/arfc-supply-cap-stmatic-polygon/14355 "2023-08-07T08:39:25Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![TokenLogic](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/tokenlogic/32/8248_2.png) [@TokenLogic](https://governance.aave.com/u/TokenLogic)\
**Post date:** [August 7, 2023, 8:39am UTC](https://governance.aave.com/t/arfc-supply-cap-stmatic-polygon/14355/1 "2023-08-07T08:39:25Z")

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

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# Summary

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.

# Motivation

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.

# Specification

The following risk parameters changes are presented:

**Polygon**

Ticker: stMATIC

Contract: [`0x3a58a54c066fdc0f2d55fc9c89f0415c92ebf3c4`](https://polygonscan.com/address/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

Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).

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<div class="post-metadata">

**Author:** ![Gauntlet](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/gauntlet/32/4064_2.png) [@Gauntlet](https://governance.aave.com/u/Gauntlet)\
**Post date:** [August 7, 2023, 5:04pm UTC](https://governance.aave.com/t/arfc-supply-cap-stmatic-polygon/14355/2 "2023-08-07T17:04:14Z")

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Our LST methodology does not support increases in supply cap beyond 50% circulating supply until the [killswitch](https://governance.aave.com/t/gauntlet-synchronicity-price-adapter-killswitch-functionality-for-lst-emode/13224/9) 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.

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<div class="post-metadata">

**Author:** ![ChaosLabs](https://dub1.discourse-cdn.com/flex013/user_avatar/governance.aave.com/chaoslabs/32/6850_2.png) [@ChaosLabs](https://governance.aave.com/u/ChaosLabs)\
**Post date:** [August 9, 2023, 8:31am UTC](https://governance.aave.com/t/arfc-supply-cap-stmatic-polygon/14355/3 "2023-08-09T08:31:11Z")

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Utilizing our [LSD supply cap methodology](https://governance.aave.com/t/chaos-labs-lsd-methodology-update/12829), and given the [Community Preference for Supply Cap Limits for LSTs](https://snapshot.org/#/aave.eth/proposal/0xf9261916c696ce2d793af41b7fe556896ed1ff7a8330b7d0489d5567ebefe3ba), we support the proposed increase to the stMATIC supply cap.