Most DEFI protocols are very far from having a proper DAO. Marinade is something really new and cool, and I believe that successfully implementing a DAO with a governance token in such a protocol could have a real positive impulse on the ecosystem. I don’t mean the Solana ecosystem, I mean the whole crypto ecosystem.
Having said that, let’s see, for a start, if we can agree on the following:
- A bi-monthly poll with 3 options written by some admin is NOT a DAO
- A forum is NOT a DAO
- A big community with a central leader is NOT a DAO
DAOs are about decentralizing decision, and are in their current form very far from their ideal. However, step by step, we are building something better than traditional organizations. Here’s my humble proposal for Marinade, hoping that you’ll be up for the challenge of building the next step in the stairs leading to true DAOs.
This proposal aims to solve 3 problems at once:
- $MNDE has no real use case (yet)
- Treasury is idle funds
- $MNDE holders don’t have any decision power on Marinade plans (at least, linked to their token holding)
The root idea
Here’s a little drawing that might explain it better than what’s below:
It’s a very simple idea, yet it will require some work to execute. Marinade is generating revenue through its msol-sol pool, and is distributing a MNDE token with a max cap of 1B tokens. Once the marinade team stacked a sufficient fund to execute on the next move (let’s say, pay all salaries for 2 years, for instance), it will re-route all the revenues into a new pool containing a few solid assets to be determined (msol/dai/usdc for instance).
The second part of the plan is to build a smart contract to let $MNDE holders use their tokens to control a share of this pool and decide how it is invested, because we don’t like idling money. There will be several strategies made available by the community (you know, liquidity farming, lending, covered calls, leveraged covered calls, whatever), but the final operation is basically put a % of the treasury into a vault.
Needless to say that thoses projects should be based on solid DEFI ecosystems, and validated by a large part of the DAO. No degen stuff in here, we’re playing the real game.
From the generated revenues of the selected strategy, the $MNDE holder will get 2 things:
- A reward part (holder gains) for beeing a holder and managing a share of Marinade’s Treasury (helping its diversification in a way).
- A investment part, that won’t get into the holder pocket directly. Instead, he/she will decide in which marinade project (proposed by the DAO) the revenues will be invested.
I don’t know what the % of each part should be at this point. Maybe 50/50. Maybe 80/20. TBD.
Since there is a billion $MNDE max cap, each $MNDE will ultimately give access to 0.0000001% of the treasury. Once this pool reached 1B USDC, each $MNDE is indirectly collateralized by 1 USDC. Note that the collateralization won’t give the value to the $MNDE token, it still a token in which the market will build hopium, but it sort of gives an absolute bottom to the MNDE token, which is destined to be raised in time.
To get the rewards, the holder must unstake its $MNDE, and at this point, the smart contract will calculate how much he made with the % of the folio he controlled. If the investment made by the holder is bad and lost money, the holder will be slashed a part of its MNDE to compensate for the loss. Any $MNDE token held by the treasury after that should be sold on the market, it’s not something that makes sense to hold IN the Marinade Treasury.
With sufficient distribution of the $MNDE tokens, its more than certain that each project will have a specific monthly budget that the team can rely on. Moreover, there can be an “engagement” from the holder to respect the project needs/roadmap (for instance, a project can require 1 year of locked staking but will give additional rewards to investors).
Note that a crucial part of this plan is that Marinade DAO will not spend the treasury directly, but only spend the REVENUES of the treasury, so
- We garanty that Marinade is a long-term player
- Each $MNDE is indirectly collateralized by the Treasury pool which should be growing over time.
- We garantie that the Treasury is managed in a responsible and decentralized way, is invested and diversified
- In case of quick need, the initial core team of marinade can sell $MNDE tokens to get quick funding (or access a % of the treasury in exchange for burning some $MNDE tokens), but there should probably be more rules for that.
- $MNDE holders are Marinade long-term players since most of the value will come from Marinade increasing its revenues
This is still a very raw idea. Let me hear what you think about that.