Hi Cerba, thank you for replying. Let me bring some answers to your concerns.
Yes, of course this is the first step of any DAO. As long as this is needed, Marinade’s focus should be to build and enforce revenue streams, and redirect a part of that to the team. But at some point, Marinade should be able to setup a “long term fund”. This proposition is to define a long-term vision, not a 3-month plan.
Let’s not forget that the crypto ecosystem can provide long-term interests close to 10% APY. If you put 10M USDC in a 10% APY vault, that’s 1M USDC available to spend for the next year. Or rather in this plan, that’s like 500k$ for the project funding and 500k$ for the $MNDE holders managing the treasury (if you choose the 50/50 approach). I’m also aware that this APY will probably go down over the years, but if the long-term fund is fed with a significant part of Marinade revenues as well, it should still be a increasing revenue over the years.
My suggestion here would be: let Marinade finance stack a 2years+ treasury, then switch to the long-term fund.
Well, I’ll answer this with the 50/50 strategy (50% of yielded interest to the $MNDE holder, 50% to invest on a Marinade project), but keep in mind that this calculation can work for any ratio.
Basically, there is a tipping point where it might become financially interesting to hold $MNDE. It depends on 2 factors:
- current market value of $MNDE
- amount available in the treasury
The calculation is very simple: If $1 of $MNDE gives me access to more than $2 of treasury (AND I trust Marinade), then I can yield more money by investing on $MNDE.
When $MNDE will be fully distributed and staked, here’s are some examples of calculations (but keep in mind that it’s far for beeing fully distributed and 100% staked):
- If $MNDE is at 1$ and the treasury is at 100M USDC, 1 $MNDE give access to 0.1 USDC of treasury. Not worth it.
- if $MNDE is at 0.01$ and the treasury is at 25M USDC, 1 $MNDE give access to 0.025 USDC, which mean I can have higher yield on my money by investing on $MNDE. Time to stake.
$MNDE is still way overvalued right now since it has no use case (IMHO), and I bet the 2nd scenario is much closer than the first one right now. But still, in this scenario, Marinade should be able to save up 25M USDC to get it running and give a base value to the $MNDE token. Nevertheless, this would allow Marinade to secure close to 1.25M USDC of funding for its projects every year. That’s a few full-time devs.
Let me put that to perspective. Marinade has right now 7.7M sol staked, at 6.67% APY. That’s 515k sol yielded for it’s users, every year (or 90M USDC at current valuation). Without expecting a Sol price action in the next years (WE ALL ARE EXPECTING IT !), 25M USDC doesn’t seem that hard to raise over a few years.
Also, Marinade has 35% of $MNDE allocation in the treasury and thoses tokens have nothing to do here. IMHO thoses should be exchanged with tokens of other protocols, that have a value that isn’t linked to Marinade, or even sold from time to time on the open markets. If not possible, the simple fact that theses token won’t be staked in the DAO will reduce by 35% the treasury amount to reach to make the $MNDE token an interesting investment (25M → 16M in the second example).
To sum it up, let’s keep our cool here. I don’t suggest a hard switch, but a long-term objective to a sustainable and decentralized treasury model. Of couse we sshould stack up the revenues from Marinade at some point to prepare the transition, but, mainly, I believe the good use of the 35% of all $MNDE tokens will play a key role here, so let’s think together about how we could play that card correctly.