IIP-119 DG2: Launch iMATIC, iETH, BTC2X, iBTC FLIs on Polygon

Decision Gate 2 is the final vote for onboarding products to the Index Coop. A full overview of the product onboarding process can be found here.

A passing vote here signals a commitment by the Index Coop to launch the iMATIC, iETH, BTC2X, iBTC FLIs on Polygon in a timely manner.

Work Team Analysis

Due to the similarity between ETH2xFLI-P and this product suite the Work Team Analysis for iMATIC, iETH, BTC2X, iBTC FLIs on Polygon will reference ETH2xFLI-P work team analysis found here.

Product Requirements

Due to the similarity between ETH2xFLI-P and this product suite the PRD for iMATIC, iETH, BTC2X, iBTC FLIs on Polygon will reference ETH2xFLI-P PRD found here.

Passing Thresholds:

• 10% or more of circulating supply must participate (2,181,385 * 0.10 = 218 138)
• 60% or more of participating tokens must vote FOR

The full-text iMATIC, iETH, BTC2X, iBTC FLIs on Polygon proposal exceed Snapshot’s character count limit. Below is an abbreviated proposal. Check out this forum post to read the full proposal.

================================================ Title: Launching iMATIC, iETH, BTC2X, iBTC FLIs on Polygon (DG2) Author(s): Pulse Inc Created: 18-Jan-2022 ‌

Simple Summary

Pulse Inc proposes that the Index Coop manages new indices that provide 2x leverage and inverse exposure to the performance of MATIC, ETH, and BTC, using the FLI strategy that was proposed in IIP-13.

Following the launch of ETH2X-FLI-P, these indices will also be launched on the Polygon network. Note: The MATIC2X FLI on Polygon already passed DG2.

Abstract

iMATIC, iETH, BTC2X and iBTC FLIs on Polygon are based on V0.1 of the FLI methodology that is also used for ETH2X-FLI-P on Polygon.

Motivation

Manually maintaining a leverage or inverse 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.