How Marinade’s MNDE will fuel on-chain DAO governance
Marinade is on a mission to make Solana open, decentralized and secure. To succeed, Marinade itself must also become decentralized.
Marinade is on a mission to make Solana open, decentralized and secure. To succeed, Marinade itself must also become decentralized.
Marinade is a DAO that was born in the spring of 2021 from achievements at two hackathons. It is bootstrapped through grants with no venture capital funding and now generating positive cashflow through liquid staking of mSOL.
The next step for Marinade to advance this mission of truly decentralizing the DAO is on-chain NFT governance.
Let’s recap where Marinade is at with the DAO to date:
Marinade launched its governance token, MNDE, on October 7th, 2021. At that time, the Marinade.Finance liquid staking solution with mSOL was just a couple months old.
MNDE distribution began with liquidity mining and a retroactive claim for the earliest users. The token represents ownership and governance rights over the protocol, with other utility being discussed within the forming DAO. Meanwhile, the chefs team was focused on advancing mSOL, the liquid staking token, widely into the Solana ecosystem. This has been achieved with 26 of the top 30 Solana protocols implementing mSOL in various ways from collateral to options trading strategies.
The work on mSOL continues with a key goal to stake 30 million SOL by the end of 2022. As for MNDE, with ~7% of tokens now out in the market, the founding team felt its responsibility to holders was to expedite the work on the DAO’s governance infrastructure so holders can have an active say in the project.
This launch officially enables the governing utility of MNDE.
Active DAO governance has benefits
To summarize the introduction to NFT Chefs, token holders will lock MNDE in exchange for voting in the DAO and receive a sweet NFT in return. That NFT becomes the right to the locked MNDE as well as enables the ability to participate in governance.
The NFT can be sold on the open market complete with the locked underlying tokens and governance rights. This unlocks the MNDE liquidity in a similar way mSOL unlocks staked SOL.
The Marinade DAO needs active governors invested in Marinade’s future. To motivate people to lock their MNDE and begin governing, tokens locked in governance could be distributed additional tokens from the DAO allocation. These incentives should illuminate the path towards engaging in active governance as a right thing to do for MNDE holders.
The Chefs team plans to put a proposal to enable this distribution with a starting rate of 100,000 MNDE per week (5.2 million MNDE per year) to an open vote for the MNDE holders shortly after the governance launch.
Thanks to on-chain governance, this rate could be adjusted by the DAO, just as the bi-weekly liquidity mining incentives that will include any roadmap boosts. To suggest changes, the Marinade community should create and discuss proposals on the public forum to shape them into votable items first.
Liquidity mining update
Week 2 surge due to Milestones distribution.
The vast majority of MNDE tokens on the market to date has come from liquidity mining. Originally, the Chefs planned to distribute 35% of Marinade tokens via liquidity mining over two years, with an expected rate of roughly 1.7 million MNDE per week. After 24 weeks of liquidity mining, the real rate, including errors and excluding milestones, settled around 1.75M MNDE per week, with a bulkier start and leaner finish. (View the full liquidity mining history in the docs.)
Liquidity mining is necessary to introduce a new token to the ecosystem. But miners aren’t necessarily invested in the project long-term so much as they are interested in the short-term yield. So with MNDE liquidity more mature following 24 weeks, several changes are now being introduced:
Milestones update
A brief refresher: Milestones, first introduced in the initial tokenomics post, were liquidity mining boosts triggered by Marinade TVL reaching a predefined level (eg. 10 million SOL staked). The goal of milestones is to motivate the growth of TVL and spread the achievement with the old and the new mSOL holders via liquidity mining.
To date, a total of 10.5 million MNDE have been distributed from the Milestone program, which at this time is 16% of all circulating Marinade tokens, a significant percentage of Marinade tokens available in the market.
Liquidity Mining Milestones officially end today, being replaced with a similar and evolved approach: Roadmap Milestones.
Marinade Roadmap Milestones
Roadmap Milestones take the idea of everyone feasting together when things go well and expand it beyond TVL. Marinade’s 2022 roadmap outlined several goals to achieve this year:
Introducing the Marinade Governance Festival
To motivate everyone to reach these goals, Marinade is introducing incentives in the most delicious way possible: Passing each roadmap milestone will trigger a festival with increased distribution of Marinade ownership, starting with the Governance festival.
On-chain governance is a gigantic step in decentralizing Marinade and enables the undeniable participation of MNDE holders in the key kitchen decisions. To celebrate this first milestone of 2022, 5 million MNDE will be distributed across governance and liquidity mining programs, spread over two weeks.
You are invited to bet on the future of a fair and open Solana: Join Marinade governance and contribute to drive, steer and build an open infrastructure in the tastiest way possible.
About Marinade
Marinade.Finance is the first non-custodial liquid staking protocol built on Solana. Stake your SOL tokens with Marinade and receive mSOL (“marinated SOL”) tokens in return that can be used in decentralized finance (DeFi). mSOL is the most widely integrated collateralized version of SOL. The price of mSOL goes up relative to SOL each epoch, with rewards being accrued into your stake account.
Marinade’s delegation strategy stakes to 400+ validators that are selected automatically by an open-source, fair formula based on performance, commission, and decentralization.
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Disclaimer: The content of this communication is not financial advice. Marinade is not a registered investment advisor. All persons are encouraged to seek their own independent financial advice prior to taking any further investment action.
