AIP - 34: Accept MAI as Collateral for agEUR on Polygon

Angle Improvement Proposals
1

Hi Angle community!

I’m Benjamin from Mai Finance. Happy to answer any questions regarding this proposal. I believe this can have a very positive impact for Angle Protocol on Polygon.

Context

MAI is Polygon’s first and largest stablecoin protocol. It has a soft peg to the US Dollar and is backed by decentralized assets like ETH and MATIC, among others.

Given MAI’s role in Polygon DeFi, it makes for a strong new collateral for agEUR.

MAI is highly liquid on Polygon, with pools on all major DEXs: QuickSwap, Balancer, Uniswap V3, Curve, and others.

MAI has a Chainlink oracle (in USD), available here: EACAggregatorProxy | Address 0xd8d483d813547CfB624b8Dc33a00F2fcbCd2D428 | PolygonScan

Proposal

Add MAI as collateral for agEUR on Polygon, with the following parameters:

Debt ceiling: 500,000
Collateral factor: 0.85
Target health factor: 1.05
Borrow fee: 0
Repay fee: 0
Interest rate: 0.5%
Liquidation surcharge: 0.98
Max liquidation discount: 0.05
Whitelisting activated: false
Base boost: 0.7

Implementation

Launching a new collateral asset is straightforward and only asks to deploy an oracle and a proxy on top of a base vaultManager implementation. There’s no extra maintenance needed to have this working, except the keeper bots monitoring the assets.

Value to the protocol

Adding MAI will help diversify the backing of agEUR. MAI is entirely backed by decentralized assets, which puts it in line with stablecoins like LUSD.

This move will also serve as an important catalyst for growth on Polygon. The widespread use of MAI on Polygon, the attractive yield from Aave market MAI, and the ability to short the Euro have strong potential for attracting more TVL to Angle on Polygon.

Risks

The main risk of adding MAI as collateral is that of a depegging event. Below are mitigating factors to the possibility of depegging:

  • Through several market downturns, notably May 2022, MAI has kept it’s peg
  • The protocol has been audited 3 times, with no notable bugs found
  • All collaterals for MAI are priced with Chainlink oracles
  • MAI has been onboarded by lending protocols like Aave and 0vix

Risk information about all MAI collaterals can be found on the community-run QiDao Risk Matrix: https://riskmanagement.qidao.community/. QiDao tracks not only global metrics like volatility and market cap, but also onchain metrics like LP centralization.

2 Likes
2

In favor of this proposal! MAI is one of the most robust stablecoin in the Polygon ecosystem, and I feel it’s important to diversify the collateral base of agEUR.

On top of that, as we’re working on setting a MAI-agEUR pool on Quickswap, having MAI as a collat should drastically facilitate getting leverage on USD (long $, short €) which is a cool way to use Angle Borrowing Module

3 Likes
3

Happy to see these two protocols starting to work closer together. of course I support this proposal.

1 Like