Marinade governance update: An upgraded liquid staking contract controlled by the DAO

Marinade continues advancing down the road of decentralization. As shared in 2022, the two primary goals of the DAO were to:

Marinade has spent 2023 in full build mode, shipping products such as Directed Stake and Marinade Native to grow its SOL stake distributed to 100+ validators and the subsequent decentralization of the network. But the second point has also been a place of focus as well. Marinade completed its migration to Realms Governance earlier in 2023. A key reason why Marinade made the transition from Tribeca to Realms was that Realms presented the opportunity to operate a fully on-chain, decentralized, and autonomous organization.

This is an important mission. Being fully on-chain, creating executable proposals that require no human to execute manual commands on the backend delivers on the promise of web-3 being fully permissionless and void of any arbitrary censorship resistance.

After all, what good is an on-chain proposal if it requires a dev at the very end to execute it manually? A human could choose not to out of protest.

Marinade has already installed this on-chain executable ability into the DAO through Realms. So far, you’ve seen this in action on Realms by observing activity in the Realms treasury. You can see funds being distributed for various reasons like grant payouts and the votes behind the Council needed to release the funds.

The next step is to move the main smart contract multisig to Realms governance and place it in the hands of token holders instead of the current 13-party ecosystem multisig.

Why MNDE holders instead of a multisig?

Until now, Marinade’s main liquid staking smart contract has been under a community multisig. Most recently, it has been a 13-party multisig requiring 6 signatures to be upgraded. To stay aligned with Marinade’s foundation as a public good, only three of the 13 parties are on the Marinade core team, with the rest of the signers selected as trusted members of the ecosystem.

But who is more invested in Marinade, the community, or its token holders with their MNDE locked in governance? As we observed in the wake of the FTX collapse and Serum, it can be unclear who even owns the keys to protocols. Marinade took the time after FTX to revisit who held its upgrade authority, which included replacing parties like Alameda and Saber with more active and trusted builders.

Builders come and go or change their focus to be less involved or aware of what’s happening at Marinade.The responsibility is more appropriate for the MNDE holders, whose incentives are most aligned, and have the most to benefit from Marinade. 95 million MNDE is currently locked in governance (+170 wallets), 1M MNDE is required for a proposal to be made active, and and a 20M MNDE quorum is required for votes to pass, thus making a governance attack expensive and unlikely.

The MNDE token has been live for two years and as a fair-launch token with no VC allocation, is already widely distributed across the ecosystem. On-chain analysis this summer from Flipside revealed that 56 wallets held over 250,000 MNDE tokens, and the MNDE top wallet only held 1.558% of supply

The mDAO also controls the undistributed MNDE (~790M). You can view the top token holders on  Realms’ MNDE stats page.

The Marinade operational multisig will continue to be under the council control, which is a 4/7 multisig. The smart contract would not fall under council control, but all MNDE token holders who have locked MNDE in Realms. That is around 95M of 205M MNDE currently on the market (178 wallets). There is an additional 670M MNDE in the DAO treasury that can be used as determined by token holders. |  View Treasury wallet

About Realms-SPL Governance

Marinade deploys the recommended  DAO-owned instance  of Realms SPL Governance and is the same contract as the Realms solana-program-library. Realms is audited prior to each release.

Marinade and any other deployed program on Realms can check their work with Anchor-verify that the binaries of the programs match Realms. Read more about the Realms DAO strategy of deployment  here. View  Marinade’s Github repository.

Separation of Power: Who controls what at Marinade?

Since the migration to Realms, Marinade DAO is made up of two parties with distinct responsibilities: MNDE holders and the Council.

The Council  is a 4/7 multisig with the following primary responsibilities:

Meanwhile, the  MNDE holders  control items including:

Coming soon: Marinade Smart Contract upgrade

“Neodyme would like to emphasize the high quality of Marinade’s work. Marinade’s team always responded quickly and competent to findings of any kind. Their in-depth knowledge of liquid-staking programs was apparent during all stages of the cooperation, including excellent and crucial knowledge of Solana’s stake program. Evidently, Marinade invested significant effort and resources into their product’s security.”— Security Audit — Marinade Liquid Staking, Neodyme AG September 26, 2023

Since going live as Solana’s first liquid staking protocol in August, 2021, there has been a tremendous amount of advancement in the ecosystem, and it’s time for Marinade’s contract to reflect and benefit from these updates.

Marinade’s core Dev team is wrapping up development and multiple audits (Sec3 and Neodyme) of the smart contract that will present a cleaner and clearer code, the removal of technical debt, and the ability to rebalance the stake pool more efficiently through the upcoming redelegate feature.

Here are some highlights (stay tuned for additional details in a forum post):

Once audits are finalized, a proposal will be created and MNDE holders will be free to pass or reject it. Upgrading the contract on-chain will be tied to the Realms proposal and will only be possible if the proposal succeeds.

Marinade is fulfilling its duty as a public good, bootstrapped with hackathon grant funding to represent the best of what is possible on Solana: a fully on-chain, permissionless, and transparent DAO governance platform combined with the best and a liquid staking protocol that capitalizes on all the latest updates to the chain.

Along with Marinade Native, the first-of-its-kind native staking pool,  Only Possible on Solana  is happening around every corner of Marinade.

You can swap Solana LSTs or deposit stake accounts instantly without unstaking on the Marinade dApp. View all your positions and optimize your stake here: https://marinade.finance/app/