Oct 13, 2022
Expanding Risk-Hedging Liquid Staking: stMATIC PYTs
Idle DAO is proud to announce the launch of Perpetual Yield Tranches (PYTs) based on Lido stMATIC.
Born with the Lido collaboration started in February 2022 and cemented in July via a mutual DAO2DAO proposal, we are excited to add a powerful risk-adjusted entry point to MATIC liquid staking on the Ethereum chain.
With stMATIC PYTs, we are expanding the toolset for users to manage and adjust their risk over liquid staking solutions.
This new product includes 50,000 LDO monthly rewards, which will last for the next 6 months. This incentive boosts performances up to double-digit APYs for stMATIC holders, distributed to both Senior and Junior liquidity providers.
Check out Senior and Junior PYTs, or get more details in our documentation.
Making MATIC more efficient with Lido
Lido on Polygon is a liquid staking solution for MATIC, backed by a decentralized network of validators and node operators. stMATIC allows anyone to participate in Polygon POS staking (therefore earning network fees and inflation rewards) and receive a receipt token (stMATIC) that can be used freely to access DeFi opportunities.
Launched in March 2021, Lido on Polygon successfully passed the capped release (phase 1), and TVL grew to 52m MATIC. Lido for Polygon has been developed by Lido DAO, in collaboration with Shard Labs.
Liquidity providers earn MATIC staking rewards and LDO incentives by just depositing MATIC into PYTs.
The flexibility and fungibility provided by Lido are also available on Idle PYTs, enabling additional DeFi use cases for Senior and Junior positions.
stMATIC PYTs: your friendly neighborhood risk-return tranches
Perpetual Yield Tranches (PYTs) are the primitive that allows LPs to access diversified risk exposure for a specific underlying DeFi protocol. The risk is redistributed across participants with different investment approaches, creating the conditions for better capital management.
PYTs generate two risk profiles: Senior and Junior. Senior Tranche benefits from principal protection, given by their first-rank priority to redeem funds in case of any underlying loss; in exchange for this coverage, Senior share a portion of the generated yield to Junior Tranches.
Hence, Junior Tranches receive a boosted APY to cover potential losses.
The protection feature provided by Senior tranches is focused on the following aspects:
- Lido Finance smart contract risk
- Polygon Network (POS) technical risk
- Lido DAO risks associated with key management and governance, for the treasury that controls the MATIC staked in the Polygon network
To learn more about covered risks, check out our documentation, FAQs, and Edge Cases.
PYTs are fully fungible tokens with no locking periods or epochs. Thanks to this infrastructure, users can deposit and redeem anytime.
stMATIC PYTs accept MATIC as the deposited asset to give users a seamless experience by staking their tokens in a few clicks. When users want to redeem, stMATIC PYTs generate an NFT representing the underlying capital. After 3–4 days, the average waiting period for stMATIC unstaking, users can finalize their withdrawal.
Wrap Up & Next Steps
We could not be more excited for stMATIC PYTs coming to our users. And what comes next is even more thrilling.
What users can expect:
- Scalable double-digit APYs for Junior Tranches and capital-protected Senior Tranches with sustainable APYs
- Direct deposit with MATIC and automatic staking/unstaking with Lido for stMATIC
- No hussle LDO rewards, just straight into Senior & Junior Tranches
- Eligibility for IDLE gauges rewards — next step: Idle DAO governance forum
- MATIC B2B rewards for integrators and businesses that want to implement stMATIC PYTs into their system
About Idle
Idle DAO is a decentralized organization that builds financial infrastructure for Web3. Businesses of every size — from brand new DeFi protocols to sophisticated institutionals — use our protocol to optimize their yield profile and manage treasuries within DeFi.
We believe everyone deserves the best for their idle funds, both in terms of returns and risks. Since 2019, we have rolled out features and services that now define a new category called automated yield services.
To learn more about our products and services:
About Lido
Lido offers simplified and secure staking for digital assets and liquid staking on Ethereum, Polygon, and Solana, with more chains to come.
Lido users can stake their assets for daily rewards whilst using staked tokens throughout the various DeFi mechanisms within the ecosystem for further compounding yields.
Lido also lets you use your staked assets to gain yield on top of yield. Use your tokens (which earn daily staking rewards) as collateral for lending, yield farming, and more.
Lido is governed by Lido DAO with an ever-increasing number of contributors, participants and proposals about how to take the protocol into the future.
