ARC: Polygon Market - wMATIC Risk Parameter Changes

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The Aave community discussed a proposal by MatthewGraham and Afromac to adjust the MATIC risk parameters (LTV and Liquidation Threshold) on the Aave Polygon Market to align with the chosen Moderate risk level. Additionally, MatthewGraham proposed the launch of a new index, MATIC 2x Flexible Leverage Index (MATIC2X-FLI), on Polygon, with a Snapshot vote scheduled for 16th-18th November.

The discussion primarily revolved around the proposal of adjusting two MATIC risk parameters on the Aave Polygon Market: LTV and Liquidation Threshold. This proposal was put forth by MatthewGraham and Afromac, aiming to align these parameters with the Moderate risk level chosen by the Aave community. The MATIC token risk score, as compiled by Index Coop, stands at B+ with a volatility score of B-. Based on this data, Index Coop suggested changing the Liquidation Threshold from 65% to 70% and the Loan to Value from 50% to 65%.

The proposal sparked a series of questions and suggestions from community members. JeremyKeating, for instance, asked for a measure of the rolling volatility using 7, 30, and 90-day periods and questioned whether the proposed change in LTV is justified. He also suggested getting Gauntlet to run this through their models to get an idea of the impact. In response, Afromac provided the rolling volatility for those time periods and noted a general trend towards lower volatility.

In addition to the proposal, MatthewGraham announced a Snapshot vote scheduled to start on 16th November and finish on the 18th November. He also proposed the launch of MATIC 2x Flexible Leverage Index (MATIC2X-FLI) on Polygon, a new index to be managed by the Index Coop. This new index would require changes in the LTV parameters to be robust and to reduce the risk of user liquidation during volatile periods. The voting for this proposal is now live on Snapshot, and users are encouraged to participate and express their views.

Posted 2 years ago

Last reply 2 years ago

Summary updated 2 months ago

Last updated 09/12 13:53