Abstract:
Marinade Finance proposes to refine its delegation strategy by removing max and min stake constraints and increasing the per-validator cap on Marinade’s TVL from 2% to 4%. These changes aim to simplify the delegation process and maintain a balanced distribution of stake without imposing unnecessary complexity.
Background
Marinade’s current delegation strategy includes a minimum stake threshold of 10,000 SOL, a maximum stake threshold set by validators, and a 2% cap on total TVL per validator. While these rules were intended to promote efficient staking and prevent over-concentration, recent discussions suggest streamlining them further.
Proposed Changes
1. Removal of minimum stake constraint
- Current state: The minimum stake (minstake) is set at 10,000 SOL.
- Change: Eliminate the minimum stake threshold, allowing any validator to receive a delegation regardless of size.
- Expected impact: Simplifies delegation logic without significantly affecting performance, as validators still need to meet auction criteria to remain in the set.
2. Removal of maximum stake constraint
- Current state: A maximum stake (maxstake) threshold is set by validators and helps self-regulate bond funding, reducing potential volatility.
- Change: Remove the maxstake threshold in favor of a single cap-based approach.
- Expected impact: This change may introduce more variability in target stakes and auction prices across epochs.
3. Increase the per-validator cap from 2% to 4%
- Current State: Validators are capped at 2% of Marinade’s TVL each and the average delegation set consists of around 140 validators.
- Change: Raise the per-validator cap to 4% of Marinade’s TVL.
- Outcome: Based on the past participation, Marinade expects at least 70 validators in the auction winning set. This change will remain a balanced stake distribution, preventing excessive concentration while still offering high-performing validators more room to grow.
Rationale
- Simplification: Removing both minstake and maxstake thresholds streamlines the delegation process, reducing operational complexity.
- Community Feedback: Validator sets have repeatedly highlighted the importance of increasing delegated amounts and reducing arbitrary thresholds. These changes reflect those requests by removing constraints that can prevent delegation growth, and by increasing the Marinade’s TVL cap to 4%.
Conclusion
By removing minstake and maxstake constraints and introducing a single cap on stake per validator, Marinade Finance aims to improve the efficiency of its delegation strategy. These adjustments simplify the staking framework and address community feedback on delegation limits.
We invite all stakeholders to discuss and vote on this proposal in the upcoming governance process. Your insights will help shape Marinade’s delegation policy to ensure it remains transparent, secure, and beneficial to the entire network.