Since people are concerned about MNDE dilution if we give more out to NFT holders, which I agree with by the way. Maybe using a royalty fee and paying people in MSOL or SOL, even if very small, would be a really great way to get people interested in locking their MNDE with us.
Not everyone cares about voting, most are looking to profit and invest in a good project. Giving a reward that doesn’t devalue our token is a win/win.
We already have deployed a mechanism to “grow” our NFTs. If we feed them more MNDE, they will grow and transform itself into a larger Octopus.
Perhaps instead of a traditional lock, we could use this mechanism to gamefy the lock process and reward NFT holders with emissions and more voting power (all at once). Instead of calling it a lock, we would say we send our octopus (or sharks, or crabs) to a Sea Farm Resort. There the Octopus would eat MNDE daily and grow slowly. As it grows, it is rewarding holders and increasing their voting power at once.
But I think 5 years is too long. I prefer liquid staking.
I also like the idea of additional incentive in mSol. The royalty fee sounds like a good idea. NFTs are sold in Sol, we could use the fee to stake Sol into mSol and give it back half to DAO treasury and half to holders.
For contributors proposing longer lock-ups or rewards to stakers, can you include the objective of the program you are advocating for? Tokenomics can become quite technical but the objective of any specific program should be straightforward imo.
IMO a “lock up” for governance purposes limits the risk of self-interested parties being able to have too much influence and then selling their positions. I want to take a deeper look at the current distribution of MNDE today to see if that’s even a real threat (another thing on my to do list).
As it relates to rewards, I’m not the biggest fan of this component of crypto but understand why it exists. Since MNDE is not a security, you need an alternative way to benefit those supporting the platform. From a strategy POV it’s a solid tool for gaining utility and partnerships. I believe Marinade has done this extremely well based on the level of integration that mSOL has had thus far.
Big fan of Cobie’s piece though, paradigm shifting thoughts in there. I don’t believe that 2, 3 years from now protocols will be relying on expensive token emission schemes to grow DAUs/TVL.
Thank you for sharing @brian_smith_0! Cobie always tells it like it is. Clearly you do too, and I love it.
To respond to your question on the objective of the program I was advocating for above (more MNDE rewards for early governance participants), here’s how I see it:
The objective is simple - provide an incentive for people to actively participate in governance at an early stage and reward those who do so with incremental voting power
The fundamental difference between MNDE and APE in my opinion is true utility. The voting power associated with locked MNDE tokens can directly influence and drive economic outcomes for validators, whereas APE’s utility is questionable at best
The MNDE locker rewards (governance staking if you will??) system therefore has a purpose - to acquire more voting power and gain more control over the distribution of staked SOL without introducing unnecessary complexity/gamification. Very different from “idk we give you more coins as a reward if you don’t sell your current coins lol”
I am operating under the assumption that the team will be putting forward this proposal as outlined in their blog post
I think that doing so is a good idea, but in light of these observations, and knowing that (without economic incentives) most protocols struggle with voter apathy, I would even suggest that the team consider modifying the plans a bit. Maybe distributing extra MNDE rewards to those who lock AND vote rather than just lock tokens alone is the right approach? What do you think?
I like the idea of being able to choose longer lockup period within the NFT than 30 days to get more voting power.
I don’t like the idea of incentivizing this with more emissions/revshare/rewards to NFT holders though. I think that possibly causes a conflict with incentives - should the incentive to lockup be to get more yield, or should it be an indication to have more say in the Marinade kitchen? I don’t see a clear match between those two.
Additionally, the NFT’s are still liquid and can be sold on secondary markets, no matter lockup period? Then the market would price in voting power value? (ex gauges etc)
If everyone, no matter lockup time, would get the same ‘rewards’ it would still mitigate voting power decay? Not sure, but that is how I see it for the moment
The question is whether you benefit more from holding MNDE instead of locking it up. You can acquire more by adding your tokens to a liquidity pool, but not by much to be fair, and you can’t vote with them. I would like to see MNDE appreciate in value, but emitting to NFT holders probably won’t do that.
A longer lockup for more voting power would be nice. It would benefit holders with a long-term view. Of course, you could argue this would give an unfair advantage to organization with deep coffers and no incentive to sell, but on the other hand it would also encourage smaller holders to hold longer. And of course you can sell these anytime so they could be more valuable to buy than NFTs with a shorter lockup.
Thanks for jumping in, @octo - I meant to bump this topic today.
I think @c2yptic’s point is not that issuing MNDE to NFT holders would cause it MNDE to increase in value, merely that it would help stall the value dilution that is likely to take place during the time the NFT is locked (because of issuance through processes like liquidity mining)
I do think that it would be good to encourage long-term locking. Personally, I’m currently more inclined for the approach of periodically adding MNDE to the NFT, given that:
This will have the net effect of a voting power increase (albeit gradually), and
It would help counteract dilution through issuance.
Otherwise I’m not sure if I’d personally value the extra voting power that much over the flexibility of selling within 30 day notice, not to mention a potential dilution I can’t plan for.
Think of it this way: after a year, you not only enjoyed increased voting power, but you end up with more MNDE than you started with.
I would be very happy seeing my NFTs appreciate in MNDE value, be it by MNDE emissions or increase in MNDE locked. Not only for the voting power and the increased monetary value but also because it’s delightful to upgrade them purely for aestetic reasons.
On reflection, it would make sense to emit enough to stall the value dilution as you point out.
I am confused by the idea locked MNDE deserves incremental MNDE issuance. As far as I’m aware, we are not issuing MNDE to people for free. Liquidity mining emissions are meant to subsidize liquidity for mSOL and offset impermanent loss risks. To the extent we are overpaying for those risks, we should reduce LM initiatives.
The locked MNDE rate is the risk-free rate of holding MNDE. Issuing MNDE to locked MNDE holders is just inflation and increases the risk-free rate in the entire MNDE ecosystem. It would reduce the appeal of yield farming in AMM pools and may actually force an increase in LM emissions to keep that capital in liquidity pools.
Moreover, two other governance proposals (validator and LM allocation gauges) would enable passive income for locked MNDE via bribes. I’m not sure the exact currency these bribes will take but they could always be converted into MNDE and locked to create the effect being discussed above.
The NFTs are only a month old and the new gauge process is a material change in MNDE’s utility. It feels premature and unnecessary to commit to staking rewards for locked MNDE until we have a better handle of what income the bribes generate and how that impacts the allocation of MNDE tokens across voting and yield farming. What is the urgency to further inflate MNDE until these more important initiatives have been implemented? We should focus on utility for the time being.
Locked MNDE is not risk-free holding. Holding has the option to sell at will. Locking the tokens adds the 30d price risk (and smart contract risk), and grants the power of governance.
Governance mining makes taking these risks more appealing. Also, it’s not inflation, there’s a fixed number of MNDE to be distributed, this is a part of the question on how to distribute them.
Governance mining creates a pipeline for distributing MNDE. While it’s easy to distribute them from the treasury initially, switching them from market buyback or replacing MNDE with mSOL in the future could be an option more easily available once protocol generates interesting enough revenue.
I agree with bribes as a factor, but they have no ETA.
I think the solution for that is to have the NFT locked up while it is appreciating in value. So the NFT would become illiquid while it is appreciating and we wouldnt have the problem of market pricing voting power.
It would be a custodial lock up, we send octopus to a retreat within Marinade website, locking them up and getting them fatter accordingly with meal plan of choice. For example:
This is just an example of how this could be gamified.
I dont see a problem with multiple incentives for the same action. I think it is part of the logic to reward participation.
Plus, if people can do something with their MNDE and NFTs, they might get an incentive to keep it. When we can get an APY on every token and NFT, it is a bit annoying to hold some in the wallet without earning something on it.
I often think about this issues, but hadnt had much time lately to express.
I think the Chef NFTs work well now, letting people lock up for >5yrs for even more voting power only strengthens rich/whales who do not need the money (and can afford to lock up further), or DeFi protocols that can write off the investment easily. It makes it harder for individuals like myself to participate.
However, if mDAO prefers to be dominated by DAOs and whales, it might be an attractive strategy. (I am not sure on this)