## Topic: Add stMATIC to Compound
Hey Everyone, I’m Kyros, Lido on Polygon BD contributor. Here is a proposal to add stMATIC as a collateral asset on Compound. stMATIC has proven its security and performance as a collateral asset on several other lending platforms like Aave v3, 0vix, and QiDao on Polygon with healthy utilization rates and a lot of value add for the ecosystem. With its deep liquidity and extensive composability on Polygon PoS, adding stMATIC as collateral makes sense for both Compound and Lido based on the asset maturity level.
Lido on Polygon is a DAO-governed liquid staking protocol for the Polygon PoS chain. It allows users to stake their MATIC tokens on the Ethereum blockchain and mint stMATIC, which represents their share of stake without the need to maintain the staking infrastructure. Users get staking rewards and still control and can use their stMATIC tokens in secondary markets on Ethereum and Polygon.
More technical details are available here: https://docs.polygon.lido.fi
The purpose of Lido on Polygon is to help the Polygon blockchain be more secure and decentralized and to integrate stMATIC with a variety of protocols and DeFi applications on the Ethereum mainnet and Polygon PoS chain.
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
stMATIC is an ERC20 token that represents the share of MATIC tokens routed through the Lido on Polygon protocol. The value of stMATIC is increasing over time due to the rewards accumulated from the Polygon validator reward emissions. There is no slashing mechanism on Polygon POS and the risk of reductions to accumulated staking balances from slashing is not part of the technology.
Lido on Polygon protocol contracts are audited: Audits | Lido On Polygon Docs.
- stMATIC has also been listed on Aave since May 2022.
- stMATIC also has a Chainlink oracle calculated price feed which makes it extremely easy to integrate into any lending market
- stMATIC growth even in the black swan events of crypto such as Terra , 3AC , Celsius and FTX has been remarkable compared to its competitors
The Lido DAO would also be open to using Pyth price feeds for stMATIC integration on Compound.
Liquidity - stMATIC currently has a TVL of 90M$ and total liquidity of 40M$ on ecosystem dexes with Balancer being the lead along with KyberSwap and QuickSwap having the maximum volume.
I propose a Max LTV of 50%, Liquidation threshold of 65%, and Liquidation penalty of 10% which is a reference taken from Aave parameters to be consistent with the same numbers
The biggest stMATIC LP Pool on Balancer Polygon
I appreciate the support from the Compound community, and thank you for considering our proposal! Hope to hear from you soon, and I am available to provide any additional support or resources that the community may need.