Proposal for a Polly Improvement Proposal: add MAI to nStable

Background:

Polly nStable nest is currently containing 4 different stablecoins: RAI, Dai, USDT and USDC. While these assets are popular, they may not offer a sufficient level of diversification and decentralisation. USDT and USDC risks for the whole DeFi ecosystem were for instance underlined in this Defiant report.

The good news is that there is no short supply of stablecoins on ETH. Polygon-native stablecoins or stablecoins highly available on Polygon are however rarer. miMatic (MAI) from the QiDAO could be a great addition for those two reasons : MAI is a Polygon-driven coin with a decent liquidity ($48m). From a technical point of view, the coin is based on a Maker fork and has been audited. The protocol TVL is around $80m, with a presence on Solana, Avax and Fantom among others.

Last but not least, MAI has at least two active lending markets on Polygon: Market (a Rari implementation on Polygon) with $1m MAI loaned and UniLend (smaller and more niche), with $100k loaned.

Proposal:

In order to increase nSTable diversification and yield, I propose to:

  • Choose a % of nStable TVL to allocate on MAI. A small allocation (1%-5%) is probably a good starting point. If the initial % is small enough, it can even be funded by converting farmed WMATIC from Aave loans.
  • Implement MAI lending on Market to generate some yields for nStable holders.

Other:

  • QiDAO team is an active promoter of DeFi on Polygon. They could probably be interested to discuss with Bao about this proposal or other possible integrations
    (e.g. enable borrowing against synths assets).
  • Out of this proposal scope but QiDAO has a governance coin (Qi) that can be a good addition to nDEFI
Do you support a formal governance vote to add MAI on nStable?
  • Yes
  • No

0 voters

I’m not sure I see any strategies viable for using MAI like with USDC and USDT

It will probably require some tweakings but there are lending markets on Market for MAI. The yield vs risks ratio and technical feasability has to be discussed for sure.

Ah I was checking their own site thanks for the find haha, from my understanding this should be possible of course someone more technical would have a better idea.

I do like getting away from USDT especially and also USDC when it makes sense. I am going to look into MAI more. Also keeping an eye on some RAI forks like H2O built on OCEAN.

My suggestion would be to wait until we have implemented a yield strategy for it, like markets. Have already flagged it as an option to add, but it doesn’t give you a token back to represent your position so will require a little extra work than one that did.

It actually does, here is the token associated to deposited Mai on the Green Locker (the largest pool so far)

Sorry, I wasn’t clear. I meant that BAO devs need to add it as a yield option to the protocol before we can use it - The contract has to automatically deposit funds there as part of the minting process.

The issue with it not giving back a token that represents your position is the redeem function no longer works, so it would have to be changed to withdraw the asset too. I’m not sure if there are other complications too with no token. After hard synths are released we may have more time to look into things like that, or if someone from the community wants to have a go I can put you in touch with the right people