Gauntlet Recommendations: stMATIC and MaticX listing on Polygon Compound v3

stMATIC and MaticX listing on Polygon Compound v3

Simple Summary

The community has expressed interest in adding stMatic and MaticX to Compound v3 Polygon. If the community wishes to list these assets, below is Gauntlet’s analysis.

We provide both conservative and aggressive parameter recommendations for the community’s preference. In the conservative recommendation, we focus more on protecting the downside risk while in the aggressive recommendation, we focus more on providing attractive risk-adjusted parameters. We defer to the community for the risk tolerance here.



In the conservative setting, we recommend liquidation parameters for MaticX and stMATIC as a strictly more conservative version of WMATIC. Given that MaticX has relatively worse liquidity condition compared to stMATIC, we recommend slightly more stringent parameter settings for MaticX compared to stMATIC.

Parameter MaticX stMATIC
Supply Cap $3.5m $5m
Liquidation Factor 55% 60%
Collateral Factor 50% 55%
Liquidation Penalty 8% 8%


We still recommend slightly more conservative liquidation parameter settings for MaticX and stMatic compared to WMATIC but with a shortened gap.

Parameter MaticX stMATIC
Supply Cap $6m $8m
Liquidation Factor 60% 65%
Collateral Factor 55% 60%
Liquidation Penalty 7% 7%


stMATIC dex liquidity as of 2023-06-16, showing good absorption at 1.6m size liquidation for USDC alone. Multiplying 1.6m by 3 to get 4.8m, we can get a ballpark on how much stMATIC can be swapped to stablecoins profitably within the recommended liquidation incentive provided in the conservative setting.

MaticX dex liquidity as of 2023-06-16. Similar arguement can be applied to MaticX.


We advocate for the implementation of aggressive parameter settings. Currently, the LTV on AAVE for MaticX and stMATIC stands at 50% and 58%, respectively. The adoption of more aggressive settings would enhance Compound’s competitiveness relative to AAVE.

Simultaneously, both MaticX and stMATIC will be integrated into the existing Polygon $USDC market, rather than creating a new market with $MATIC as the base asset. We acknowledge that this proposal may not position Compound as the first choice for those engaged in leverage loop strategies. However, we believe this approach aligns with our broader objectives and provides a balance between risk management and competitiveness.

We vote for the proposed conservative approach. Avantgarde Finance