Polygon Builder Series vol.6 — Ben and Kila QiDAO
Polygon Builder Series is a video and blog series where our host Nemo talks with fellow builders on Polygon.
MAI is a stable coin collateralized by your MATIC holdings. It’s powered by Qi Dao, a protocol that enables any cryptocurrency community to create stablecoins backed by their native tokens.
What is MAI (miMatic)?
MAI is a stablecoin backed by collateral, and can only be minted with this collateral backing it. MAI is created when users deposit accepted tokens (currently MATIC) as collateral in vaults and in turn receive a loan against that collateral. Users can also mint MAI through the USDC Swap where MAI is minted in exchange for USDC. MAI is soft pegged to the USD, meaning that 1 MAI is around 1 USD.
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Catch the whole podcast below:
[00:00:14.130] — Nemo
Hi, everyone, and welcome to one more episode of Polygon Builder series where I talk to fellow builders. My name is Nemo and today I have Ben and Kila from QiDAO. Hi, guys.
[00:00:33.800] — Nemo
Can you tell us a bit more about you guys and QiDAO and how everything started?
[00:00:40.060] — Ben and Kila
Yeah, I think we can maybe start by talking a little bit about QiDAO so we are CDP stablecoin — collateral deposition stablecoin. Kind of like MakerDAO. Kind of like LiquityProtocol we allow you to take your tokens, lock them up and then borrow on the value of those tokens to make stable coins. So then the stable coins are backed by the value of your collateral. There are some differences. For example, we don’t charge interest rates. Uh, yeah, there’s some other nuances.
[00:01:09.580] — Ben and Kila
But in general, that’s that’s kind of what we did.
[00:01:12.070] — Nemo
Nice. And what are the current collateral that people can use?
[00:01:16.030] — Ben and Kila
Yeah. So right now we can use MATIC. Polygon, native currency. And we recently voted to have other market tokens. So you’ll be able to have these yield bearing assets from AAVE in order to lock them in as collateral. But many more to come. And I think as we go on, we might have some alpha to share with you.
[00:01:37.420] — Nemo
Nice. Yeah, I saw some of the things there on the platform, but yeah, let’s go through the whole podcast and we’ll see, we’ll see what alpha we’ll share with everyone. You guys are a polygon native project. So I’m really curious to hear about your general experience, how it was to build on Polygon. And can you share something with the fellow builders, like, in your opinion, things that they should have in mind while they’re deciding to build on top of Polygon like some lessons learned or whatever you feel like?
[00:02:08.740] — Ben and Kila
Yeah, yeah, um, I guess I could take this on, so it’s it’s been pretty nice. I think I’ve had some experience building on other networks, but I’ve never experienced something like this. I really don’t know how Polygon team does it. Uh, we have a group chat with them. They help us everywhere from the technical side, like those kind of integration questions, but also just like getting on the phone and talking strategy and like business development they look out for opportunities for us, it is very, very hands on and, you know, across the organization, Sandeep, Humza, everybody just, um, all hands on very, very kind. Yeah. I mean, just even as an example, when we were trying to test out our vaults, uh, they they created a separate group on telegram, invited a bunch of people to come and test out our vaults, when nobody, nobody knew about us or anything like that. It’s it’s been has really been hands on the entire way, even even to this day when they see something that we should keep an eye on, they’ll send it to us on telegram. Um, constant communication. I couldn’t be happier building on Polygon.
[00:03:37.660] — Nemo
Let’s dive a bit more in QiDAO. So can you give us some of the examples or some of the cool stuff that you can propose people, how they can actually use a QiDAO for their own leverage in the crypto ecosystem?
[00:03:55.480] — Ben and Kila
Yeah, I mean one is just if you wanna HODL. All right. Right now we have MATIC as collateral, if you’re very bullish on MATIC and you have bags and bags of MATIC that you don’t want to sell, but you have expenses that come up, maybe you have a car bill that you need to pay, mortgages coming up. So you want to use the. You want to. Use the value of it, but you don’t want to sell it, because in a week tomorrow, two days, MATIC, just go to two dollars rather than what it is right now. And so what we enable you to do is still hold on to that MATIC. Put it in a vault and now you can just borrow against itself. So you take out some stable coins. So you have one hundred thousand dollars worth of MATIC. You put it into a vault, you can borrow up to sixty six percent of its value. And now you can use that. You can use that MAI stable coin. You can go and spend it, you can convert it to other other tokens, you can leverage your position, you can leverage your position. So if you’re very bullish on MATIC, you can use your MATIC metastable coins, buy more MATIC. So it really allows you to utilize the tokens, the collateral that you have a lot more efficiently. Yeah. That’s, that’s one, that’s one way. So you have your HODLers, you’ve got your, your leverage.
[00:05:28.870] — Ben and Kila
I mean it’s almost as much a lending platform as it is stable coin protocol. You know, let’s say you mint your MAI, but you really wanted to borrow, I don’t know, wBTC, you can just buy it. And then it’s essentially borrowing BTC at zero percent interest. Yeah, I think that is that is a big thing as well as it is zero percent interest. You don’t have to you don’t have to pay it back in a specific time frame. So if you wanted to borrow MAI and you wanted to hold it for 10 years, you’re not incurring any interest. You don’t have to make monthly payments. The the only payment that you do make is right at the end when you’re paying it back, there’s a small point, five percent repayment fee, but that’s it.
[00:06:23.110] — Nemo
There is so many different stable coins, so many different experiments in the whole space. So one interesting thing is that right now there is a lot of the stable coins that are mostly in these pools and are supplied there for the yields. But then there is a question of what is the future of the different stable coins and how we can actually utilize and use more those stable coins. How the future looks like for stable coin utilization?
[00:07:07.990] — Ben and Kila
Yeah, I think they’re kind of two different perspectives here on one side, what what we’re doing is trying to increase the use of MAI stablecoin for itself. Right, as opposed to for earning yield. We’ve been working with Polygone team and recently they said that they’re going to be using MAI as their token of choice when they have hackathon bounties. Another aspect is capital efficiency. Um, you know, on one hand, you can you can increase the amount of things you can use with one token. So when we start adding other market tokens, you know, you can deposit your MATIC into AAVE and earn yield, compound the yield you’re getting from AAVE and at the same time, borrow MAI and be able to use that whatever way you want. Um, so it’s just increasing. What you can do with the tokens that you have, uh, is something that aside from yield farming. I think what is very or could be very, very big for people is if, if they do, if they do put their MATIC on AAVE earning yield and then they’re able to use that as collateral, that collateral is always growing. So like your being able to borrow off of collateral, that’s continuously just earning interest. So and you’re not paying any interest on borrowing it. So you kind of have this negative interest rate that you are able to achieve their.
[00:09:31.740] — Nemo
Are you guys exploring automations for CDPs? Because I think that would be a game changer for the whole system.
[00:09:45.660] — Ben and Kila
Yeah, absolutely. So we’re exploring that with a few different teams. I mean, we saw that right when we kind of started. Where we started, and I think maybe week three when we started there was that May Black Swan event. Yeah, we saw a lot of volatility there. And also from that we have changed the way that our liquidation process works. We had full liquidations back then and now we have partial liquidations. So if you do fall below a 150 percent collateral to dept ratio, you’re not completely wiped out of your possession or out of your collateral. That’s only partial, I think a six percent, six percent.
[00:10:28.470] — Nemo
So it’s kind of like automation? Just selling part of your collateral to cover
[00:10:43.020] — Ben and Kila
Yeah. So can do a little bit less than that. You can save yourself a bit of, uh, some percentages. And I think what’s important is for another team to do it. You know, we don’t want to be the ones to build it because it’s important to have that kind of decentralization, kind of those like Lego blocks if we’re the ones that are automating, this can be kind of complicated. But I mean, that’s something we’re exploring and we’re looking to how that’s going to look. Yeah, and because because honestly, it would be really cool if you could set it up to where if if your your vault is getting low, it can supply itself with either collateral or it can start paying back debt itself just to help save like, say, your position. So there’s something like self paying, self paying depth, that could be pretty. That’d be pretty cool. Yeah, we’re looking into it with a few different, few different other other teams, but. Yeah. Or it’s it’s really it’s really just kind of exploring right now. Yeah. We’ve got a lot on the plate right now with different things that are coming out. But yeah, definitely something that we’re keeping an eye on.
[00:11:52.860] — Nemo
Got it. So for any team that is listening out there or any builder that wants to play Ben and Kila are more than happy to collaborate with you. So if anybody wants to play with, automation’s on top of QiDAO, just like slides to their DMS. OK, gang. Like, do we have anything else that you would like to share?
[00:12:28.080] — Ben and Kila
Yeah, yeah. I mean, I want to talk a little bit about a governance. Look, I don’t think we covered it. So QI is our governance token, which is used to make strategic decisions on the platform. Right now we’re voting on a partnership with mStable. Right. Also, we’re talking to MakerDAO, BadgerDAo, Indexcoop for future integration. So, um, you know, holding qi helps you vote on those kind of things. You can control revenue, you know, kind of like what to do with that. Yeah. I mean, the thing is, is that we’re growing really fast. It’s still very, very young. I mean, we’re about nine, nine weeks in. And the QI holders right now can have a lot of influence in the way that QIDAO is going to be, you know, going to be built. And so we really want like it’s a community project. We want them to influence what happens with QiDAO. And so in order to do that, you know, holding QI is going to be your best bet. We are going to be also rolling out EQI, which is escrow QI. Yeah. And so that’s going to give you additional voting power to be able to really, really influence the way things happen. So, for example, if. We’re going to be throwing out votes on what next collateral types you wanna see, so if you have a specific collateral type that you really want to see, well, then, hey, you’re making the decision. You’re making decisions. Your vote really does matter. Yeah. And a little bit more about that. That’s going to be kind of like an event. We’re going to have a period once we start adding other collaterals in which every week will add a new collateral. And, you know, we’ll get one we’ll have some like events around that. But then you’ll be voting for the next week and the next week. So having QI is going to be important, you know. So if you’re holding a lot of WBTC and you want it to be collateral, you know, we’ll have that for you. Also the revenue that’s coming in. I mean, help, help decide where that goes. Yes, that’s all owned by the QI shareholders.
[00:15:24.330] — Nemo
Nice, and how big is the team right now?
[00:15:34.860] — Ben and Kila
It’s mostly, full time team. I think the community has been really fantastic in helping kind of supplement what we need. So we have bounties that we put out to help generate some content. We’ve had people help on us, on different sides like we have designers, economist giving us their analysis. So, yeah, a lot a lot of feedback from the community. But yeah, the core team is all full time people.
[00:16:11.640] — Nemo
Yeah. So this is super cool and I’m really excited to see what will happen next for the whole community. For anybody that was listening, as I said, please reach out to Ben and Kila if you want to build anything and collaborate with them.
[00:16:55.950] — Ben and Kila
Really appreciate it Nemo.
[00:16:58.500] — Nemo