[MATIC] - MIP6 Collateral Onboarding [updated]

If approved, would Polygon utilize this class of vault themselves? Are there any specifically identified users — individual or entity — who have expressed an intention to use this class of vault if MakerDAO onboarded this collateral?

Any information about demand for or attestations by particular users of a desire to use this type of vault would be helpful. Thanks!

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As Matic / Polygon ecosystem has been growing rapidly, I can see Matic collateral playing an important role in expanding Dai supply and usage (especially Dai on Polygon). Thanks for applying

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Given the current WMATIC/SUSHI liquidity mining and the growing TVL on Polygon, I expect this vault will become quite popular to use.

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So much potential can be achieved through Polygon. Everyone deserves to experience it.

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I think the same, and I agree that Matic would be a very good collateral for Maker DAO, and would be the second L2 to be accepted as collateral in the protocol.

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Matic has demonstrated sufficient maturity in the market, has attracted the attention of many serious Ethereum protocols, and is undoubtedly my favorite network for commissions and versatility. Matic would be a great collateral :sunglasses:

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We’ll have another greenlight poll for MATIC in the coming weeks, given the recent popularity and increased liquidity of the token.

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MATIC and SUSHI should definitely be onboarded as collateral and hope the rest of the community approves.

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I for one will vote for both, Matic is tearing it up! And Sushi in every Sidechain or L2 solution is present, and speaks very well of his project.

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I’m curious if this was ever answered in private or elsewhere by people from Matic. Matic’s rise is reminiscent of the rise of LRC a few months back when that project seemed to be winning the L2 race. Things change very quickly in terms of which L2 solution gets attention.

It would be very reassuring if there was a clearer picture of how much demand there is for a Matic vault before we proceed further.

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I think judging by TVL is the best barometer for user adoption. LRC cannot compete in that front.

Polygon team sincerely thanks the MakerDAO community and team to swiftly process all the governance activities/polls and their feedback to onboard MATIC as collateral.

This is important in Polygon’s long term vision and commitment to grow the Ethereum scaling landscape and attract the smartest builders and engaged community members. Polygon will be opening a vault on Maker and committing $50M of MATIC tokens as seed liquidity from the treasury.

Following this we will be minting DAI which will be used to invest in the Ethereum ecosystem.

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I look forward to seeing this vault green-lit. I am a fan of polygon and hope it succeeds.

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Super good to see the team taking an active approach in ensuring the usage of the vault!

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Following up on this, the Polygon team would like to request an increase in the debt ceiling to $100 mn DAI and would be willing to mint upto $100 million DAI.

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@sourcex glad to hear this. What would be the amount of MATIC used to collateralize 100m DAI debt? One of the main inputs for defining debt ceilings on Risk side is to compare it with on-chain liquidity, because the liquidation system relies on it. Selling $10m of MATIC on layer 1 via 1inch leads to 14% slippage. I suppose large chunk of Matic liquidity is on Polygon, but measuring slippage on Quickswap doesn’t yield astonishing results as well. Most of the volume happens on Binance and Coinbase, but we can’t count too much on these volumes during a potentially large liquidation event.

From this perspective you either need to assure better on-chain liquidity for MATIC or we need to increase LR sufficiently above proposed 175% for your proposed $100m exposure. This might though price off other users. We did risk assessment for MATIC and proposed $10m debt ceiling to start, but as shown here we are able to increase it only to about $20m range at 175% collateralization ratio.

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We can do a collateralization ratio ~300% -350%

Would also love to know your inputs on what would be a good CR for $100 mn debt ceiling

Hello @Hamzah_Khan – I was wondering what has created this excitement to go from a request of 50M DAI DC to 100M? You mention that DAI will be used to invest in the Ethereum ecosystem–can we assume this is for seed investments in other protocols? Seeing some excitement around Rario, the cricket NFT Platform. Is this a good example?

BTW, if you can get Virat Kohli to be the official spokesman for Rario, that would be :fire:

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Wow, we had some alpha here and didn’t even know it. Congrats to Polygon on their announced merger.

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Polygon via MATIC fits my criteria as a larger TVL player that will mint significant DAI. Given that they are a significant L2 player and their token is minted on L1 gives reasonable assurance of security. MATIC is listed on a number of key CEX’s so trading and liquidity is robust.

There is some concern that the team is predominantly from India where the government has not show a positive approach to crypto but even if India were to kill crypto use it probably would not hurt Polygon that much. Though it could impair teams from getting payments legally. I don’t see this as a major impediment.

If MATIC is willing to deposit something like 300-400M of MATIC to borrow 100M of DAI at, at least 3% SF (might want to run this one a touch higher at like 4%) and have a decently high LR (at least 150) I would support giving them a DC of $100M. Realize the vast majority of this would probably end up on Polygon network to support borrowing there. I believe this would be good for both Maker and Polygon and simply requires some decent management.

Biggest issue here is going to be having parties ready to buy if this massive vault were to come under the liquidation gun so I really would like to hear from the Polygon team about how they are going to stagger liquidation prices. I personally would like to see them use multiple vaults with different CRs so this simply can’t happen or at least have something in place for automated CR management. I mean the team clearly has the collateral to toss to avoid liquidation I just want to try to make sure this is solidly in place because I don’t think the liquidation system could handle a single chunk of 100M very effectively in a dropping market situation. Particularly if everything is dropping (ETH, wBTC, with MATIC and the rest simultaneously).

Regarding using this DAI to invest in Ethereum Ecosystem. My expectation is that it is a portfolio diversification and investment strategy to basically grow the PolygonDAOnetwork into a family of DAO’s and products and reduce exposure to MATIC price by taking on cash at what is a pretty cheap rate 3%. Polygon could take this DAI and plow 35-45% into COMPOUND and lever it to earn 10-11% to cover the entire 3% SF on the rest. Really a shrew’d play to borrow cheap and loan to pocket the interest rate spread. Bonus is it gives them cash to manage token price so it is my hope that Polygon opens up a pretty sizable MATIC-DAI uniswap v2 type LP to start building price support via liquidity positions.

I would be very supportive of a Uniswap MATIC-DAI v2 LP vault on Maker btw as this would fit perfectly with my DeepLiquidity thesis regarding community value building and it would bring more DAI online faster than LR changes or RWA. Sure 100M isn’t that much but it is a good step and better toward MATIC vault DC in the 200-500M range which at 3% would be 6-15M DAI revenues/yr.

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