Listing MaticX on Compound

Proposals
1

Topic: Add MaticX to Compound

Hi Everyone, I’m Gautam, business lead for Stader’s MATIC staking product, MaticX.

Below is a proposal for adding MaticX as a collateral asset on Compound. Using MaticX as a collateral asset has added significant value on other lending platforms like Aave v3 (Polygon) with supply caps being reached and a popular leveraged staking strategy increasing utilization rates for MATIC. For Compound, MaticX offers a good collateral option because of its extensive use and composability on Polygon.

Background - Stader Labs
Stader is a leading multi-chain liquid staking protocol that is currently live on 6 chains including Polygon and is soon going live on Ethereum.

  • ~US $110 Mn in TVL
  • 50k+ unique wallets staking

Background - MaticX
Stader’s staking solution for Polygon is MaticX, a liquid staking solution for MATIC. Stader lets users earn MATIC staking rewards and also enables users to participate in other Defi protocols using MaticX while accruing rewards.

MaticX is a token that represents your share of the total MATIC pool deposited with Stader. As soon as you deposit MATIC on the Stader smart contract, you receive newly minted MaticX, based on the exchange rate at the time of staking. As the MATIC rewards get added the value of MaticX increases (w.r.t MATIC) To illustrate the above explanation, here is a video.

Stader for Polygon gives you

  • Liquidity through tokenization: Users can participate in Defi using the liquid token.
  • Ease of staking: User-centric design of Dapp to make staking seamless for users
  • MaticX is the only solution that allows users to natively stake their MATIC on Polygon, allowing users to take advantage of the low transaction fee

More technical details are available here: Stader for Polygon - MaticX FAQs

MaticX currently has a TVL of ~67.5M MATIC and ~$16M in MaticX supplied on AAVE (supply cap reached).

There is also a combined liquidity of ~$16M in MaticX based liquidity pools on leading DEXs split as below:

  • Balancer: ~$11.1M
  • QuickSwap: ~$3.4M
  • MeshSwap: ~$1.4M

Also, the current rewards on the primary MaticX LP on Balancer are ~9.5% , about 2x+ those of comparable LPs, thus the size of the LP is expected to grow significantly

MaticX Summary:

Screenshot 2023-05-15 at 11.42.17 PM
Screenshot 2023-05-15 at 11.42.17 PM1221×858 42 KB

MaticX Token Address:

MaticX Security:

  • Stader on Polygon protocol contracts are dual audited:
  • Here is the link to the Audit completed by Halborn
  • Here is the link to the Audit completed by Immunebytes
  • Stader’s contracts for MaticX are controlled by a multi-sig account (0x91B4139A2FAeaCD4CdbFc3F7B1663F91a54be237) managed by the internal as well as external parties. The confirmation count is 3 out of 5 signatures required
  • $1Mn Bug Bounty on Immunefi.
  • Ongoing monitoring and on-chain security tracking by Forta
  • External multi-sig and time-lock for staking contract

MaticX - Key Reasons to List on Compound

  1. MaticX is deeply integrated with DeFI projects such as Aave and Balancer.
  • There is ~$16M liquidity in MaticX based pools cross leading DEXs.
  • 17.2M MaticX supplied on Aave - current supply cap is exhausted.
  1. In order to integrate it into any lending market, MaticX has a Chainlink Oracle calculated price feed
  2. MaticX TVL has grown to ~$67M steadily ever since its launch in Apr’22.
  3. There is about ~15mn MATICX on Polygon that haven’t been deployed on DeFi yet, which offers a large TVL opportunity for Compound

Source: https://dune.com/stader_labs/MaticX-metrics, polygonscan.com

Parameters

Liquidity - MaticX currently has a TVL of $67.6M and total liquidity of ~$16M in MaticX based liquidity pools on ecosystem DEXs with Balancer being the lead along with QuickSwap & MeshSwap.

My proposal is to set the parameters for MaticX on Compound as

  • Maximum LTV:50%,
  • Liquidation threshold of 65%
  • Liquidation penalty: 10%

For reference current parameters for MaticX on Aave v3 Polygon market are:

  • For all assets: Max LTV: 58%; Liquidation threshold: 67%; Liquidation Penalty: 10%
  • E-Mode (enabled for MATIC): Max LTV: 92.5%; Liquidation threshold: 95%; Liquidation Penalty: 1%

—

Your support and consideration of our proposal is greatly appreciated!

I look forward to hearing from you soon, and I am happy to provide additional resources and support to the community if needed.

Best regards,
Gautam

15 Likes
2

Hi Gautam. I think this is a great idea and I am glad to see the community brainstorming new collateral assets for Compound III.

7 Likes
3

Hey @Gautam_Stader, thank you for posting this!

I am on the Fuji Finance team, and we are building a cross-chain money market aggregator. Our product currently supports CompoundV3 on Polygon (as well as other Compound instances).

Having MaticX added as a collateral type for CompoundV3 would be quite advantageous from our perspective since we are already planning to support a vault on Polygon which rebalances positions with MaticX as the collateral type, while borrowing for USDC.

Having Compound added as a market that supports MaticX will improve the borrow rate that users are able to access from Compound as well as other money markets.

This would be a great opportunity for Compound, Stader, and Fuji to collaborate to help improve the borrowing capabilities for MaticX on Polygon and bring more TVL to the Compound ecosystem!

2 Likes
4

Liquid staking has been gaining traction in today’s DeFi landscape. If we look at AAVE even MaticX is also maxed out on AAVE and the balancer pools have a healthy liquidity to consider.

All in all, I believe that this is going to be a good add as there is a sizeable amount of MaticX that will flow into this market.

3 Likes
5

As a sizeable MaticX holder, I support this proposal. It would allow me to borrow stablecoins from time to time or even open a leverage loop strategy if I feel an imminent price upside for $MATIC.

Hope this passes. Thanks!

1 Like
6

I think it is a great proposal. Stader’s emphasis on security (with double audits) and providing convenience to Polygon users (staking on Matic available that lowers gas costs) makes MaticX a great LST to add to Compound market. Hope we can see leveraged staking loop with Matic soon on Compound.

2 Likes
7

I think it will be great to add MaticX as a collateral asset on Compound. Because it will be us with more DeFi plays on Polygon ecosystem.

2 Likes
8

Reflecting on the success of MaticX on AAVE, we concur that it’s prudent to contemplate its listing as collateral. The two largest depositors (each over $2MM) of $MaticX on AAVE comprise Polygon Foundation (0x8d365687a75dc7688864822869ae0551bb6fc105) and a Smart LP (0xf8249b8d751f54dc7b317603ffffc4cbd093c543). The former primarily borrows stablecoins, while the latter engages in a leverage loop strategy on staked Matic.

There are two options for listing $MaticX: 1. the deployment of a distinct comet Matic market, or 2. its addition to the existing USDC market. The first option provides greater convenience to those implementing leverage strategies, albeit at the cost of increased complexity for stablecoin borrowers (as manual conversion from $matic to stables would be required).
Though as suggested by @kevin,

this problem could be solved by compound or the community building a front-end that combines those steps into a single txn (similar to how we use the Bulker` contract to bulk your supply + borrows into one txn)"

As the community agrees transitions gradually from v2 to v3, we should focus more on ensuring that comet remains competitive with AAVE, particularly in terms of user experience.

2 Likes
9

Once this proposal has reached more community consensus, Gauntlet is happy to conduct analysis from a market risk perspective.

3 Likes
10

MaticX is currently maxed out as a collateral in the other money market in where MaticX is currently accepted as a collateral. Actually it went from 16M to ~29M since this original post.

I think if there is a chance to still increase the global collateralization cap for MaticX in Polygon(Pos) that should be allowed now for CompoundV3.

3 Likes
11

Please find Gauntlet’s analysis and parameter recommendations for MaticX here.

2 Likes
12

Hi everyone, I’m from Stader Polygon team.
Publishing the MaticX token checklist here for your reference.

Happy to answer any questions on this. Thanks.

4 Likes
13

Hi everyone,

We have raised the PR to list MaticX on compound

The parameters have been set based on Gauntlet’s recommendations Gauntlet Recommendations: stMATIC and MaticX listing on Polygon Compound v3

Would love the community to review and share any feedbacks.

CC - @cylon

1 Like
14

The above PR has been merged into feature branch.

Updated PR to review

1 Like
15

OpenZeppelin’s Security Team has read through PR 780, which aims to add MaticX as collateral on Compound’s Polygon USDC market. The goal of our analysis was not to provide a full security audit but rather to ensure that the data being used and the protocol interaction is accurate. We checked:

  • that the cited contract addresses for MaticX and the Chainlink price feed are correct
  • that the deployment strategy (of adding an asset and then redeploying the market’s implementation) is correct
  • that the configuration data for the new collateral asset matches the “aggressive” parameters found in Gauntlet’s analysis
  • that the proposed price feed today has a healthy amount of operators (fifteen)
3 Likes
16

Governance Proposal is live for voting!

1 Like