stMATIC is a representation of MATIC staked through the Lido protocol to secure the Polygon PoS blockchain.
stMATIC is a low-cap, fully collateralized asset. This asset is exposed to the underlying risks of Lido, a protocol rated as Solid. stMATIC is backed by MATIC staked on the Polygon blockchain. stMATIC is redeemable for MATIC plus accrued staking rewards following an unbonding period. The asset has an uncapped supply but has inflation control or burn mechanisms in place.
stMATIC is highly correlated to the overall market.
Lido is a liquid staking platform for Proof-of-Stake blockchain assets that allows users to stake their asset without needing to lock assets or maintain the required infrastructure. This enables users to continue participating in DeFi activities related to lending and market making. See our risk assessment of Lido for more details.
Users receive stMATIC tokens when depositing their MATIC into the Lido staking contract. Lido will calculate the current stMATIC-MATIC ratio and send the corresponding amount to the user. The stMATIC represents the user's share o the total supply of MATIC tokens inside Lido. It is a non-rebase token which means the balance in the user's wallet does not change. Instead, the value of the token is changing as Lido earns staking rewards or incurs any penalties. There are no lock-up or minimum deposit requirements when staking through Lido.
MATIC deposited into the Lido staking contract are subsequently delegated across Polygon validators that are part of Lido on the Polygon network. Users who wish to unstake must wait an unbonding period of 3-4 days. In the meantime, users can always exchange their stMATIC for MATIC through exchanges that offer liquidity like Quickswap's stMATIC-MATIC pool.