(Updated to Remove MNDE Validator Voting Mechanism)
Abstract
Following the recent approval of MIP-11 (MNDE buybacks) and MIP-5 (MNDE-Enhanced Staking), this proposal refines both mechanisms during the implementation phase. The proposal increases buybacks from 40% to 50% of total protocol fees and introduces a new Active Staking Rewards program funded by 25M MNDE tokens to replace the current 10% MNDE-Enhanced Staking allocation.
UPDATE: This proposal now also removes the MNDE-based validator stake cap voting mechanism. The feature has seen minimal use and adds unnecessary complexity. With all stake now flowing through SAM based on eligibility and performance, the delegation process no longer requires additional token-voting influence.
The current 10% MNDE-Enhanced Staking allocation requires complex technical development that would delay the implementation of MIP-11’s buyback mechanism. This proposal replaces that allocation with a simpler Active Staking Rewards program that can be implemented alongside the buybacks without technical delays.
This changes the approved allocation from:
- 50% treasury
- 40% buybacks
- 10% MNDE-Enhanced Staking
To a simpler structure:
- 50% treasury
- 50% buybacks
- Governance rewards through dedicated 25M MNDE budget
In addition, the governance-driven validator stake cap mechanism (part of MNDE-Enhanced Stake) will be deprecated to further simplify MNDE’s utility and governance incentives.
The Opportunity
Marinade’s governance thrives when the community actively participates in key protocol decisions and updates. This proposal creates stronger incentives for MNDE holders to engage in governance, fostering a more involved community that can guide the protocol’s future development.
By introducing rewards for governance participation, the proposal encourages deeper community involvement in important decisions about validator selection criteria, treasury allocation, and protocol upgrades — without relying on per-validator voting mechanisms, which are being removed as of this proposal.
Modified Buyback Allocation
The proposal increases MNDE buybacks from 40% to 50% of total protocol fees by removing the 10% allocation previously assigned to MNDE-Enhanced Staking.
The increased buyback allocation enables the DAO to acquire more MNDE tokens from the market, which are then held in the DAO treasury. This mechanism operates automatically based on protocol fees, with execution details reported to the community for full transparency.
Active Staking Rewards Program
The Active Staking Rewards program operates with a 25M MNDE budget to reward governance participation. The concept is simple: holders who vote in governance receive MNDE rewards proportional to their participation.
The reward calculation works by giving holders points equal to their voting power for every Realms vote in 2025. For example, voting with 1,000 MNDE on 4 proposals earns 4,000 points. Rewards are calculated based on total community points and distributed as a single payment at the end of 2025.
Example: If you earn 4,000 points, total community points equal 100,000, and the total reward pool is 25M MNDE, your reward would be 1M MNDE.
To participate, holders vote in 2025 governance proposals and keep tokens in their wallet during voting. Rewards will be distributed once, at the end of the year.
Removal of Validator Voting via MNDE
Previously, holders of Locked MNDE could support validators by raising their SAM stake caps through Enhanced Stake voting. However, this feature has seen low usage, adds technical and governance complexity, and is no longer necessary under the updated delegation model:
- Marinade now allocates 100% of stake through SAM.
- Validator eligibility and performance determine stake distribution.
- MNDE-based vote weighting on validator caps adds unnecessary noise to an otherwise merit-based system.
This change simplifies MNDE’s role in the protocol and aligns governance participation with voting on proposals that shape long-term development.
Benefits for MNDE Holders
- All MNDE holders benefit from increased buybacks (50% of protocol fees), boosting treasury-held MNDE and reducing circulating supply.
- Active governance participants earn direct rewards through the new 25M MNDE incentive pool.
- Governance influence is simplified by focusing on protocol-level decisions, not validator-specific voting.
The result is a cleaner governance framework with clear rewards and less technical overhead.
Timeline
- Implementation begins in Q3 2025.
- Buyback increase goes live immediately.
- Validator stake cap voting is deprecated at the same time.
- Governance participation tracking begins in 2025.
- Reward distribution for Active Staking occurs at year-end 2025.
More details about reward distribution mechanics will be shared closer to the end of the year.
Why Vote Yes
This proposal strengthens Marinade’s governance and token economics by:
- Implementing the approved buyback mechanism faster
- Incentivizing active community participation
- Removing low-impact, complex mechanisms (MNDE validator voting)
- Creating a cleaner, more focused governance framework
Vote YES to support deeper community engagement, improved protocol efficiency, and streamlined MNDE utility.