[Temp Check] - Community Preference for Supply Cap Limits for LSTs

Title: [Temp Check] - Community Preference for Supply Cap Limits for LSTs

Author: @ChaosLabs

Dated: 2023-04-18

Summary

The current supply cap methodologies of the risk managers on Aave V3 incorporate a high-bound of 50% of an asset's on-chain circulating supply to mitigate counterparty and concentration risk.

In the discussion around supply cap increases for MaticX and stMatic, the community has questioned this limit due to these LSTs' price feeds and redeemability mechanisms, making counterparty risk the primary concern.

Mission

The following vote aims to gauge the community's preference concerning limiting the supply caps for LSTs, which will be considered in future supply cap recommendations. The options are:

• Option 1 - Limit supply cap to 50% of on-chain circulating supply
• Option 2 - Limit supply cap to 75% of on-chain circulating supply
• Option 3 - Do not limit the supply cap as a percentage of the circulating supply