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)
If everyone max locked, proportional voting power would remain the same as it is right now. So no this doesn’t favor whales. It favors those with longer time horizons for holding their MNDE.
We value signal and a higher Discourse score won’t buy you anything in particular.