Simple Summary
Gauntlet recommends the following risk recommendations to the protocol:
Risk Parameters
| Status | Comet | Asset | Collateral Factor (CF) | Liquidation Factor(LF) |
|---|---|---|---|---|
| Current | Polygon USDT | stMATIC | 60% | 70% |
| Proposed | Polygon USDT | stMATIC | 0% | 0% |
| Current | Polygon USDC.e | stMATIC | 60% | 65% |
| Proposed | Polygon USDC.e | stMATIC | 0% | 0% |
Rationale
- Per their website, Lido is deprecating stMATIC on Polygon.
- Setting the CF to 0% prevents any additional borrowing in these markets.
- Setting LF to 0% will cause the liquidation of any existing loans on these comets. This is necessary to eliminate liquidity risks as the deprecation proceeds.
- Currently, there are no positions on Polygon USDC.e using stMATIC, and two positions remaining on Polygon USDT. Since both of the positions are relatively small, these liquidations are not expected to have a significant impact.
Next Steps
- We welcome community feedback.