[ARFC] MaticX Risk Parameter Interest Rate Polygon v3 Upgrade
Vote Result: YES
Rationale
The rising deposit trends of MaticX, the borrow and deposit loop after enabling borrowing (i.e., the recursive strategy), and the new Balancer pool all point towards the need to set a higher SupplyCap of MaticX. Also, the arbitrage scenario through borrowing is clear. Gauntlet and Chaos Labs have both analysed this proposal, and while it is a bit too aggressive (at 8.6 million, the supply cap is on the higher end of Gauntlet’s aggressive recommendations and higher than Chaos’ suggested 7.8 million), it is necessary given that the supply cap of MaticX has already been reached. Some of the risk of MaticX is also mitigated by the fact that unstaking is live on the Polygon blockchain and anyone can mint / burn MaticX for the underlying asset in roughly 3 days. Any peg variations are also arbitraged and there is no particular reason to consider MaticX as illiquid.
We support the growth of Aave V3 Polygon’s usage through adjusting risk parameters to promote the recursive MaticX/wMATIC strategy, which is what most MaticX/wMATIC is used for on v3 Polygon, by voting YES on this proposal.