rMATIC, a decentralized DeFi product produced by StaFi that solves the liquidity problem of staked MATIC on Ethereum mainnet.
rMATIC token is a synthetic staking derivative issued by StaFi when they stake MATIC through the StaFi rMATIC product. rMATIC tokens are anchored to the staked MATIC and the corresponding staking rewards. rMATIC tokens can be transferred and traded at any time.
rMATIC product can help MATIC stakers solve two major issues:
1) There will be no need to wait for 80 checkpoints（around 9 days) to withdraw the staked MATIC. Users can transfer and trade rMATIC tokens at any time to liberate liquidity and hedge price risks.
2) There is no need to learn the complicated PoS consensus (based on Tendermint) mechanism or staking reward calculation rules if you want to maximize staking rewards. With the rMATIC product, users only follow a few steps to deposit MATIC into the rMATIC contract, which will automatically select the best validator for delegation by the profit maximization strategy.
When a user deposits MATIC into the rMATIC contract, StaFi will calculate the amount of rMATIC based on the current exchange rate between MATIC and rMATIC. When a user holds rMATIC, StaFi will calculate the amount of redeemable MATIC based on the real-time staking reward of MATIC.
The rMATIC exchange rate Ci grows with the increase in staking income. It is determined by the total number of MATIC locked in the staking contract Qstk, the total number of redeemed MATIC Qred, the number of staking rewards Qrew, the number of slashes Qslh, the commission rate Rcom, the total number of rMATIC issued M, and the total number of burnt rMATIC N. The calculation formula is as follows:
Through rMATIC, StaFi solves the following problems for MATIC holders:
1) There is no need to worry about the liquidity of staked MATIC. Users can trade rMATIC on Uniswap at any time in the future.
2) The rMATIC contract integrates a strategy for maximizing staking rewards, which automatically selects a group of Original Validators with the highest rewards on the chain for staking.
3) The rMATIC contracts will automatically collect the staking rewards to restake. So stakers don’t need to withdraw the staking rewards manually and then restake to generate the compound interest like before.
rMATIC App serves to solve the liquidity of MATIC staking. The core participants are as follows:
Original Validator (OV)
Validators on the Bor chain (sidechain operator layer of Polygon) who apply to be validators of rMATIC products are called Original Validators (OV). For details, please refer to StaFi rToken Paper.
StaFi Special Validator (SSV)
The validators who control the asset relationship in the staking Contract is called SSV. SSV mechanism adopts a distributed key management solution with the panel rotated on the chain. For details, please refer to StaFi WhitePaper SSV.
Based on the PoS consensus mechanism(Tendermint Consensus Engine) of Heimdall Chain, the PoS layer of Polygon, and the influencing factors of staking rewards, the rMATIC product adopts the following staking rewards maximization strategy:
1) Diversified delegation. The MATIC tokens deposited by the user will be distributed to several(N) mini staking pools. N will be based on the scale of the deposit. Each staking pool will then select several (M) validators for delegation by the profit maximization strategy, so as to reduce the slashing occurrence probability of a single node.
2) Strictly select Original Validators candidates. The rMATIC product will evaluate the performance data of original validator candidates from the metrics including online duration, slashing record, self-bond ratio, node identity, commission ratio, etc., to ensure that excellent validators with relatively low commission are selected.
3) An automatic delegation strategy that maximizes staking rewards. The solution monitors OV’s on-chain data in real-time, such as commission ratio changes, commission volume ranking, slashing, off-line rate, and other indicators. This ensures that in each Epoch, the system selects the best OVs for delegation while simultaneously reinvesting profits.
4) A strategy that minimizes the potential loss. When the system detects that the node is slashed or the online rate is lower than the standard, the rMATIC staking contract will automatically initiate the redelegate operation and re-select other qualified validators for delegation.
Users could redeem the staked MATIC and corresponding rewards through rMATIC App. After receiving the request of redemption, rMATIC contracts will automatically unstake and withdraw MATICs from the MATIC staking contract deployed on Ethereum, then send the MATIC tokens to the user’s Metamask address after around 9 days.
When users redeem the MATICs, there will be a redemption fee charged at 0.2%, of which the details are listed in rMATIC Charge chapter.
Since the Heimdall Chain( the PoS verifier layer) of Polygon uses the Tendermint consensus engine to develop PoS mechanism, the slashing risks minimization strategy will be the same as the rATOM.
Through rMATIC, StaFi can help users avoid slashing in the following ways:
1) Staking Contract favors those validators who do not have slashing history to become official OVs.
2) Validators with a higher proportion of self-bond will be preferred for OVs so that OVs are motivated to avoid slash.
3) Staking contracts will select several OVs for each nomination so that a certain slashed OV will not have a huge impact on user funds if it gets slashed. Therefore, even if an OV is slashed (the probability very low), staking rewards will not be affected.
4) When slashing is detected on a delegated node, the rMATIC contract will immediately execute the Redelegation on the above node to minimize the loss.
Users do not need to claim staking rewards when using rMATIC App, and the on-chain staking contract will automatically re-stake the rewards to generate the higher APR.
When minting rMATIC, users have to pay the gas for cross-chain relayers who are monitoring the Ethereum MATIC Staking module in real-time and paying related cross-chain fees. Therefore, the commission in minting rMATIC can be calculated through this formula: N * (StaFi chain Gas Fee + Ethereum Gas Fee), and the payment is made by FIS, StaFi mainnet token.
N is a flexible parameter and it will be set lower than 1 at the start to lower down the total staking expense of MATIC stakers.
The rMATIC product will charge part of staker’s staking rewards as the commission, which includes the commissions charged both by the validator and StaFi. The commission collected by StaFi and Original Validators will not exceed 20% of staking total rewards.
When a user redeems staking assets, s/he only needs to apply for redemption on StaFi’s staking dashboard. The redemption process is mainly divided into two steps:
Step 1: Enter the amount of rMATIC , which can’t exceed your rMATIC balance.
Step 2: Confirm and apply. The system will burn the rMATIC token you applied for, and calculate the amount of redeemable MATIC by the exchange rate. The balance, after deducting the service charge, will be sent to the user’s wallet address.
The service charge (Feered) is determined by the users’ applied quantity for redemption M, the current rMATIC/MATIC exchange rate Rc, and the redemption rate Rr :
Rr is currently set at 0.2% in the initial stage.
StaFi will create rich, multi-level circulation scenarios that stretch across different chains for rMATIC holders:
1) When the rMATIC product is launched, rBridge will at the same time support rMATIC two-way cross-chain bridge function from StaFi chain to Ethereum, so that users can have access to DeFi applications on Ethereum by using rBridge product.
3) StaFi will not only support the circulation of rMATIC in the Ethereum ecosystem but also empower rMATIC’s engagement in the DeFi protocol of Polygon through cross-chain bridge services.