Marinade's 2022 roadmap: A midyear's update

This summer is very different from the summer of 2021 when Marinade launched on mainnet.

Flash back to February 2021 when the Chefs began working on Marinade with a vision to strengthen and decentralize Solana and onboard people around the world to decentralized finance. By summer, the shipping cycles were fast and the nights were sleepless as the small team raced to launch Marinade’s mSOL on mainnet. The result was mSOL, Solana’s first liquid staking token.

Jump to the present and things have changed, both at Marinade and across Solana. Despite the fact the bear market has arrived and most projects’ tokens are well off their peak since the collapse of Terra and 3AC, we’re nevertheless grateful for this new era. The space has matured with fewer distractions and more focus on responsible building for the years to come.

The past few months have also seen widespread Solana adoption. It has become a leader in the NFT space, which in part led to some network congestion, and the magical Solana experience we grew to love in its beginning had its growing pains. The slowdowns were a reminder that it doesn’t matter if it’s cheap to send transactions if most of them aren’t going through in the end.

So given the state of Marinade and Solana in the present day, this bear period has made everyone at Marinade think once again: What are we after? Are we doing impactful work? Where can we help the space the most?

Ideas are beginning to crystalize about where to go from here. But first, if you recall Marinade’s 2022 roadmap, it was set up around two main objectives:

Decentralizing Solana was marked by three original goals set for 2022 EoY:

TVL growth: 24M SOL (plan) vs. 0.9M SOL (progress)

We aimed to get from 6.5M SOL to 30M by the EoY 2022, while now looking at 7.4M SOL staked in Marinade, good enough to achieve the №1 spot for Solana TVL according to DeFi llama. It would be tempting to blame the lack of progress on the market or general Solana DeFi growth but it's crucial to face it: we're behind in this metric and not growing at the rate we envisioned.

However, there are three other areas for growing Marinade’s TVL: Unstaked SOL, the SOL staked with Superminority validators, and the SOL held by the Solana Foundation.

1. Unstaked (127M SOL)

There is currently around 127M unstaked and unlocked circulating SOL with roughly 12–14M of that on exchanges. This leaves us with 115M SOL and an estimated 34.5M SOL in self-custody wallets.

This shows the obvious targets for converting SOL to mSOL: custodians to allow liquid staking, exchanges to list mSOL, and wallets/exchanges to integrate Marinade’s liquid staking in their interfaces.

And then we’re still left with 34.5M SOL sitting idle on wallets. We need to learn more about those users, understand what role does SOL play in their life, and make sure Marinade really conveys the message and the benefits of liquid staking for them.

2. Top 29 validators (132M SOL)

The top 29 validators forming the security group, whether we like it or not, form 1/3 of the total stake on Solana. Most of them have been early investors to Solana and have been self-staking on their own validator node. Besides strengthening the network and unlocking the staked SOL liquidity, there is zero economical benefit from them turning their stake into Marinade. They would lose all their stake since Marinade does not delegate to the superminority.

While we began experimenting with applying governance factors to the delegation strategy, for now, there’s no incentive for the top 29 to come and support Marinade. And for some of them, it may be considered a tax burden to use SOL in liquid staking.

We’ll be looking at strategies or products to make it mutually beneficial for not only the biggest validators but for any self-stake validator to work something out with Marinade. If you have an idea yourself, feel free to share on our forum or Discord.

3. Solana Foundation (80M SOL)

For a validator to break even at a 10% commission they need about 60k SOL. The new validators coming to Solana used to rely on either Solana Foundation’s delegation program or Marinade’s algorithmic delegation strategy.

But now with the Solana Foundation program waiting line growing up to 12 months until it’s your turn to get some portion of the stake, the only immediately viable option for new validators outside staking to themselves is Marinade.

We understand the slow onboarding process of the Solana Foundation might be on purpose due to making sure to onboard high-quality operators, KYC process, and so on. That’s why we also made it a high priority to revisit our delegation strategy to make sure it’s robust, emphasizes quality of service and for how long has the operator been performant and running.

Our long-term goal at Marinade is for it to be owned by the Solana ecosystem and a public good infrastructure project owned by everybody benefiting from its operations. That’s why we think it makes perfect sense for the Solana Foundation to consider contributing part of their 80M treasury SOL to the Marinade ecosystem, which includes all the other protocols that integrated mSOL, the staked and decentralized version of SOL.

We believe there is tremendous opportunity in the ecosystem if more SOL isliquid staked. We would be happy to use our algorithmic approach to ease the burden of the Solana Foundation in distributing SOL to new validators while decentralizing the network.

Should 10,000 validators be a key priority for Marinade?

Marinade initially had a plan to help onboard 10,000 validators to Solana. But in short, more validators doesn’t necessarily equal more performance. Moreover, with current economic conditions and incentives, this goal doesn’t make sense in the near term- Marinade would need to have a much higher TVL in order to make it economically viable to further spread out the stake.

We shouldn’t push the validator count if the quality of the network is at stake, pun intended, and the total of 1,798 mainnet validators is acceptable for now.

However, that doesn’t mean we shouldn’t strive for making the stake more spread out across the existing set of validators. Since February, Solana’s Nakamoto Coefficient grew from 16 to 29 and reaching 40 by the EoY 2022 is still certainly achievable.

What’s next for Marinade?

Marinade is energized following spring and summer travels which included the first-ever team retreat in Italy along visits to numerous Hacker Houses across Europe. Following collaboration with one another and leaders in the Solana ecosystem we have an ambitious road ahead. Highlights on the roadmap at this time include:

Completing each of these brings us closer to decentralizing Marinade and, while we don’t have exact numbers here to allow some flexibility along the way, we’re committed to acting on all of these projects by EoY 2022. We plan to release a specific plan later this year going into more detail about how to get from the current state to token voting.

Lastly, an update to Marinade’s mission

So far we talked about decentralizing Solana and decentralizing Marinade, while in reality what bothered us the most in the past months were the network’s performance issues.

We want to forget about sending the failed transactions over and over again.

We want to bring back the joy of hitting the button and successfully landing your transaction within seconds. Because this UX drives adoption, it makes crypto accessible, it lures new users in, and retains the existing ones.

And we feel like for us to make sure the complete experience is stellar and to our standards, we need to own it.

So far we’ve put all our efforts into making Solana the most decentralized, now Marinade’s goal is to make Solana performant and decentralized.

Thanks to Marinade being the #1 project in Solana DeFi with over 7M SOL staked and thanks to its network of validators, frequently used dApps, traders, liquidators, and arbitrageurs, we’re in the best position to become a trusted contributor to the core base layer. Quite soon we plan to introduce some ideas about how to overcome the performance problems of today and shape a better Solana for the future. To bring back that joy of using the network, that magic moment.

Let’s recap: Here are Marinade’s new objectives (and respective key results) for 2022 EoY:

Meanwhile, this is what we have achieved and shipped during the first half of 2022:

Marinade rebrand: we rebranded in January, setting the stage for not only a unique and welcoming voice on Solana, but also the introduction of our Chef NFTs.

NFTs and on-chain governance: Marinade’s Limited Edition NFTs minted in April and led to on-chain DAO governance. To-date the DAO has voted on multiple proposals helping to decentralize ownership of key decisions. Over 74M MNDE (about 59% of token supply) is currently locked in governance.

Validator and Liquidity Mining gauges: Gauges, which enable Chef NFT holders to reward validators or protocols with the MNDE votes, are live and have over 35M MNDE tokens used to vote on them so far.

The Decentralizer: The Solana Foundation provided the Marinade team with a grant to build a non-custodial, no-fee solution to stake pools. Over 270K SOL is staked in the Decentralizer.

Token Exchange: Working on the vision to decentralize Marinade into a DAO owned by key builders of Solana, the Token Exchange brought in to the kitchen a collection of top validators and protocols.

№1 Solana TVL. Marinade achieved the top spot for Solana TVL according to DeFi Llama in January and has maintained that position through most the year. Prior to the significant market downturn, Marinade at one point held over $1 billion in assets locked and Blockworks Research even labeled Marinade the “Base layer of Solana DeFi.”

You can watch our progress in public and if you feel like helping us shape better Solana, let us know on email or stop by our Discord to say hello.