stMATIC Compound Listing

## 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.

## Background

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:

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 token](Lido: stMATIC Token | Address 0x3a58a54c066fdc0f2d55fc9c89f0415c92ebf3c4 | PolygonScan)

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.

  1. stMATIC has also been listed on Aave since May 2022.
  2. stMATIC also has a Chainlink oracle calculated price feed which makes it extremely easy to integrate into any lending market
  3. 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.

## Parameters

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.

Best regards,



Welcome Kyros and thanks for starting this discussion!

I personally think stMATIC makes a lot of sense to add as a collateral asset in the existing USDC Comet market. Since Comet does not support rebasing tokens, is there a wrapped version of stMATIC that could be used instead?

Another idea (which can be done in tandem) is to launch a separate Comet market with MATIC as the base asset. Users would be able to supply stMATIC as collateral and borrow MATIC to unlock the use case of leveraging up on MATIC staking yields (similar to the cWETHv3 market that’s on Ethereum mainnet).

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stMATIC is a non-rebasable token, and therefore functions in the same way as wstETH does without the requirement to be wrapped up as stETH does.

Having a Comet market with MATIC as the base asset would be a great addition to the protocol in my opinion, however I would suggest the use of additional collateral assets with similar security and performance to stMATIC so that the protocol is not solely reliant on a single collateral asset. While purely speculation, a section of Coinbase’s wallet suggests that they may soon have a MATIC staking solution that may function similarly to cbETH. I’m aware that there are other tokens that represent staked MATIC that may also warrant further research for consideration of adding as collateral assets in a MATIC Comet market.

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That’s good to know!

Agreed, would prefer there to be other staked MATIC assets with sufficient liquidity to add as collateral before we start such a Comet market.

Hi hi!

I’m Lido DAO contributor for the BizDev. Happy to see the proposal having a positive initial reaction.

Would just like to add color here on why we should not wait for other staked Matic solutions to mature for bundle listing. stMATIC is the biggest staked asset in the Polygon market, and listing on Compound would help with derisking of lending market centralization.

Currently, stMATIC is listed on Aave and Mai Finance however, Aave is dominating the whole ecosystem. I firmly believe that to grow and further push utilization of stMATIC and lending markets in general, markets itself need to be more diverse.

I’m not at liberty to discuss Coinbase situation, but it does not have sense to limit Compound growth based on speculation and time to maturity of other protocols in the bear market.

Open for feedback and discussion here.

Thanks everyone!

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Ignacio from Avantgarde! just wanted to say that we’re totally on board with this proposal. If you’re looking to mix things up a bit in the collateral assets, we’ve got a suggestion: how about adding Stader Labs’ Staked Matic, MaticX? It’s a robust and widely used asset that’s gaining a lot of popularity in Balancer.

Appreciate the support on the proposal. However cbMATIC/MaticX’s liquidity is a issue . The LP size on balancer is almost 4 times smaller than stMATIC and would create problems in case of liquidations . Adding MaticX/cbMATIC atm would not be the best choice of collateral compared to stMATIC which has LP depth and max composability on polygon

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I have personally been working with the Lido team and Kyros for over a year now to help grow stMATIC on Polygon PoS. That being said, I am 100% in favour of this proposal and feel that this would be a great addition to Compound v3 on Polygon.

Borrowing USDC against $stMATIC makes more sense that borrowing against $MATIC since you are essentially borrowing USDC at a discount, since the staking APR of $stMATIC is 4.28% which is greater than the borrow APR of $USDC which is currently 3.92% with extra $COMP rewards of 3.35%. As a result you are getting paid to borrow $USDC against stMATIC on compound :grinning:

There is already ~24m $stMATIC tokens on Aave and this proposal would definitely see a huge inflow to compound v3. Dont think there is much to think about here :grinning:

Lets :passenger_ship: :passenger_ship: :passenger_ship: :ship: :ship: :ship:



Personally, I am a big supporter of this proposal. As we’ve seen across Mainnet and PoS chains broadly, LSD adoption remains a core driver for DeFi. Adding stMATIC as collateral is a natural fit, allowing Compound to differentiate its Polygon markets relative to other chains, as well as increases ecosystem adoption of the Compound platform, while simultaneously bolstering network security as stMATIC adoption grows.

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Just wanted to clarify that the bundle listing discussion was in regards to a new Comet market on Polygon where MATIC is the base asset. This new market will serve the use-case of levering up on staked MATIC yield (e.g. deposit stMATIC, borrow MATIC, buy more stMATIC).

In terms of adding stMATIC as a collateral asset to the existing Comet market where USDC is the base asset, I agree there is no need to wait for other versions of staked MATIC to take form.

Also just curious if the Polygon or Lido team currently know what the most popular use-cases for using stMATIC as collateral is. Is it generally used to borrow a stablecoin or MATIC?


This is certainly a natural add on. With LSD on the rise having multiple LSD tokens listed as collateral would be also helpful in growing their ecosystem on the chain.

stMatket also has the biggest market outside of ETH and has seen tremendous success on AAVE as well. This would serve as the natural way to grow it even more.

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Most of the stMATIC on Aave is used to borrow wMATIC via e-mode. However, there is also a lot of demand to borrow stablecoins as well. stMATIC is also used as collateral to borrow $MAII]($1.00 | miMATIC (miMATIC) Token Tracker | PolygonScan) which is an over collateralised stablecoin from QiDao

stMATIC has been around for more than a year and continued to grow inspite of the events like terra, FTX etc… and I strongly feel that it is mature enough and battle tested to be listed on compound v3 (Polygon)


Thank you @Kyros for writing and publishing this proposal, and I appreciate the discussion and comments in this thread. Seems like there is a lot if interest for stMATIC.

Listing stMATIC as a collateral on Compound will be beneficial for the entire Polygon ecosystem as it brings us one step closer to making stMATIC the ultimate Polygon DeFi asset.
Being on Compound in the early days sets the base and enables building the supply for protocols built on top of Compound V3.

One important factor is to distribute the risk from the current lending platforms and provide more flexibility for protocols and users which is seriously improved by expanding to Compound as one of the tier 1 lending markets in the space.

Jakov, Lido on Polygon head

We are supportive of listing stMATIC on Compound III Polygon as well as a separate deployment for supplying stMATIC and MATIC as the borrowable asset. The suggested parameters seem reasonable, however, we might need a separate discussion if a stMATIC/MATIC comet market is deployed.

Both deployments capture the current market demand for stMATIC nicely and will be a great revenue driver for Compound!

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If Compound was interested in a Token Report similar to those made in our recent grant please reach out. Our token report quickly mitigates the smart contract lists from the OpenZep checklist.


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

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There is a compound community call on May 31st where this would be discussed. I think that should serve as enough consensus :pray: