Proposal: Add Support for stMATIC (Lido)

Overview

This is a proposal to add stMATIC to the Polygon v3 market.

Aave governance recently added stETH to the Ethereum v2 market with great success, having a market size of $1.43 billion. The stMATIC token is similar but differs in one important aspect. Instead of being a rebasing token like stETH, it simply becomes more expensive over time relative to MATIC as it accrues yield.

Since Aave governance enjoyed stETH, I would venture to guess they will like stMATIC as well.

In addition, this will unlock leveraged MATIC yield positions similar to the ETHMAXY token by the Galleon DAO.


Background

[following content taken from Jakov of Shard Labs]

Lido is a DAO governed liquid staking protocol for the Polygon PoS chain. It allows users to stake their MATIC tokens on the Ethereum mainnet and immediately get the representation of their share in the form of stMATIC token without maintaining staking infrastructure. Users will get staking rewards and still control and utilize their stMATIC tokens in secondary markets on Ethereum mainnet and Polygon.

MATIC tokens will be delegated across validators that are registered and accepted by the DAO inside Lido protocol.

Node operators don’t have direct access to the delegated assets. They are just providing infrastructure and getting rewards in return. Assets are controlled by Lido core smart contracts exclusively.

The goal is to help with Polygon decentralization and integrate stMATIC with the variety of protocols and DeFi applications on Ethereum mainnet and Polygon PoS chain.

In short, Lido on Polygon is enabling users to:

  • Stake their MATIC tokens in a decentralized and secure way
  • Use their stMATIC on the secondary market
  • Do all of the above simply and easily with a click of a button on the UI

Additional value Lido can bring to the Polygon ecosystem is decentralizing stake distribution, and getting more capital efficiency in the ecosystem — enabling staked MATIC to participate in DeFi on Polygon.

stMATIC token

Polygonscan Link

stMATIC is an ERC20 token that represents the account’s share of the total suuply of MATIC tokens inside Lido system. It is a non-rebasable token, which means that the amount of tokens in the user’s wallet is not going to change. During time, the value of this token is changing, since the amount of MATIC tokens inside the protocol is not constant.

Paramenters

Using the relative parameter adjustments between ETH and stETH, I propose the following for stMATIC

Max LTV: 55%
Liquidation threshold: 62%
Liquidation penalty: 15%

10 Likes

greatly in favor of this proposal.

while the stMATIC presence and liquidity is still relatively small, stMATIC is a great candidate for V3 emode and great collateral form.
I think onboarding stMATIC will help the asset grow in a mutually beneficially relationship.

liquid staking assets will grow exp this year and Aave should be on top on their onboarding.

6 Likes

Full support to have stMATIC listed on Aave

May be of interest to add : Contract Address 0x3a58a54c066fdc0f2d55fc9c89f0415c92ebf3c4 | PolygonScan

1 Like

Thanks, I added a link.

The StETH listing has been a big success, and so I’m excited to see StMATIC might be next.

Could you please provide the details as described in the New Asset Listing Governance Guide. The community needs to understand in detail how StMATIC works and its risks.

I would also like to understand how you calibrated the risk parameters and justify the higher borrowing power than MATIC which has

  • Max LTV 65%
  • Liquidation threshold 70%
  • Liquidation penalty 10%
2 Likes

Hi @tomuky,

I am excited to see stMATIC added as collateral on the Polygon market. It would be very complimentary given the recent MATIC risk parameter changes made.

Just following on from @Alex_BertoG, if you would like a hand to prepare a risk assessment or for it to be done for you, please do let me know. We can definitely help out here.

3 Likes

@MatthewGraham Absolutely! You are capable of doing a much more comprehensive risk assessment. I merely wanted to kick off the discussion.

Thank you, Matthew! I’m excited to get this moving forward.

@Alex_BertoG My original parameters were (incorrectly) using stETH parameters. For the time being, I’ve updated them to be more acceptable, applying the relative adjustments between ETH to stETH for MATIC to stMATIC. Ultimately, I’d like to see what Matthew comes up with.

3 Likes

Hello,
Voicing my support for this initiative, Liquid Staked asset are the future of France, this onboarding has the potential to help both V3 and stMATIC bloom into the Polygon network.

5 Likes

Snapshot vote has been created: Snapshot

1 Like

Fantastic to see this proposal and the positive support.

Lido Marketing Lead here, just chiming in to say ideally we can drop the terms ‘PoLido’ or ‘Lido for Polygon’ to describe this.

We strongly prefer Lido on Polygon

$0.02,
AD
@AD_1508

@AD_1508 Updates made. Thanks!

3 Likes

Thanks for this initiative! Amazing

1 Like

Jakov from Shard Labs here, very happy to see this proposal live on snapshot already!

Same as AD’s request, please replace the “PoLido” and “Lido for Polygon” with “Lido on Polygon” inside the snapshot vote itself (if it is possible to do it at this point?) @tomuky

2 Likes

Ty ser! Much appreciated

@ShardYaco Unfortunately, can’t edit snapshot proposals. But I do link to this page.

Hi tomuky
Seems you still havent provided any of the details of the Asset Listing Governance Guide shared above. Without information and risk analysis, how do you expect the community to be able to take an informed decision on the snapshot? You admitted to guessing the parameters you suggested, this is an extremely low security standard for Aave and the liquidity on the protocol :roll_eyes:

1 Like