IIP-105 DG1: Launch MATIC 2x Flexible Leverage Index (Polygon)

This is the first of two votes required for a new product to be onboarded to the Index Coop.

A passing vote here signals the Index Coop's intent to further research the MATIC 2x Flexible Leverage Index (Polygon) feasibility resulting in a product prioritization score.

Passing Thresholds:

• 5% or more of circulating supply must participate (2,181,385*0.05 = 109 069)
• 50% or more of participating tokens must vote FOR

FOR - Pass MATIC 2x Flexible Leverage Index (Polygon) Index through Decision Gate 1. Begin work to research & assign MATIC 2x Flexible Leverage Index (Polygon) a product prioritization score.

AGAINST - Do not pass MATIC 2x Flexible Leverage Index (Polygon) Index through Decision Gate 1.

DG1 is a signaling step to gauge community sentiment. The full-text MATIC 2x Flexible Leverage Index (Polygon) exceeds Snapshot’s character count limit. Below is an abbreviated proposal. Check out this forum post to read the full proposal.

================================================ Title: Launching MATIC 2x Flexible Leverage Index (MATIC2X-FLI) on Polygon Status: Proposed Author(s): Pulse Inc Created: 11-Oct-2021

Simple Summary

Pulse Inc proposes that the Index Coop manages a new index that provides target 2x leveraged exposure to the performance of Polygon’s native MATIC token, using the FLI strategy that was proposed in IIP-13.

In contrast to previous FLI products, MATIC2X-FLI will be launched on the Polygon network.

Abstract

MATIC2X-FLI is based on V0.1 of the FLI methodology that is also used for ETH2X-FLI and BTC2X-FLI. ‌

Motivation

Manually maintaining a leverage position requires continuous monitoring of the health of the position in order to avoid liquidation and incurs high gas fees when the position is frequently rebalanced.

‌Rationale

Flexible Leverage Indices (FLIs) solve this problem by wrapping a collateralized debt position in a single token that can be bought and sold on an exchange and by socializing implementation costs. Furthermore, FLI’s unique index algorithm reduces rebalancing needs by an order of magnitude. Emergency deleveraging is possible during Black Swan events for additional safety.