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.
Analysis
Conservative
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% |
Aggressive
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% |
References
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.
