Summary

This AIP increases the stMATIC and MaticX Supply Cap on Polygon to 40M units and 38M units respectively.

Abstract

The utilisation of the stMATIC and MaticX Supply Caps has reached 100% and is preventing strategies built on Aave Protocol from depositing into these reserves.

The yield maximising strategy is current incentivised by two communities, Polygon Foundation and Stader Labs. These incentives encourage users to deposit either Liquid Staking Token (LST) into Aave v3 Protocl.

This AIP, with support from Chaos Labs and a favourable Snapshot, shall increase the Supply Caps to enable users to deposit funds in the stMATIC and MaticX reserves on Polygon v3.

Motivation

Over the previous months, Llama has been working with various communities to craft favourable conditions on Aave v3 Polygon to facilitate the creation of several yield aggregation products. These products are now active with more soon to be deployed.

With conservative Supply Caps being implemented and filled within minutes, or hours, communities who have built products on Aave v3 are experiencing great frustration. After investing time, resources and incurring audit costs, these communities are unable to promote their products to prospective users without the newly implemented Supply Caps being filled.

For these integrations to be successful, the Supply Caps need to be increased such that a wide array of prospective users can enter into these automated strategies. Currently, the smaller Supply Cap increases are filling quickly and we are experiencing several whales / products absoring near 100% of newly implemented Supply Caps is not promoting a desirable UX for users.

The original ARFC links below:

• MaticX Forum Post
• stMATIC Forum Post

The proposed Supply Caps are supported by Chaos Labs. However, Gauntlet has a more conservative risk model which limits the Supply Cap to 50% of supply on the network relative to Chaose Lab's 75%. This difference leads to differing Supply Cap recommendations. Do note, Aave DAO voted to increase the Supply Caps to 75% of supply. A Snapshot vote for each Supply Cap is linked below:

• MaticX Snapshot
• stMATIC Snapshop

The community has shown clear support for increasing the Supply Caps in line with the original.

The stMATIC and MaticX Supply Cap on Polygon to 40M units and 38M units respectively.

Specification

The following risk parameters changes are presented:

Polygon

Ticker: stMATIC

Contract: 0x3a58a54c066fdc0f2d55fc9c89f0415c92ebf3c4

Parameter	Current Value	Proposed Value
SupplyCap	32,000,000 units	40,000,000 units

Ticker: MaticX

Contract: 0xfa68FB4628DFF1028CFEc22b4162FCcd0d45efb6

Parameter	Current Value	Proposed Value
SupplyCap	29,300,000 units	38,000,000 units

Implementation

A list of relevant links like for this proposal:

• Test Cases
• Payload Implementation

The proposal Payload was reviewed by Bored Ghost Developing.

Copyright

Copyright and related rights waived via CC0.