Introduction
Since MIP-15 passed, protocol revenues are directly accrued to the DAO treasury, while the Marinade Labs team received a 100M MNDE grant to fund operations for the next 12 to 18 months. This change means that Marinade Labs only owns MNDE to fund expenses.
MNDE being much less liquid than mSOL, selling MNDE today to fund operations would put significant selling pressure on the MNDE token, especially given current market conditions.
Proposal
In order not to add sell pressure to MNDE to fund expenses, Marinade Labs is suggesting transferring the accumulated mSOL in DAO treasury (2,279 mSOL, worth $437,000 at current prices) to the Council wallet. In exchange, the Council wallet would transfer 9,741,000 MNDE tokens (worth $437,000) back to the DAO Treasury. Instead of selling on the market, Marinade Labs would be exchanging those MNDE with the DAO Treasury.
To avoid creating new proposals requesting similar transfers over the next few months, this proposal also suggests redirecting protocol fees to the Council Wallet. Every month, the Council wallet would transfer the equivalent value in MNDE back to the DAO treasury, so that the notional value of the DAO treasury remains the same as if it accumulated the protocol revenues. This monthly transfer would stop when fees are directed back to the DAO treasury.
Rationale
This proposal would allow Marinade Labs to avoid selling MNDE in the market while still covering its expenses and growing the protocol’s TVL. mSOL is a much more liquid token than MNDE, and selling it on the market to fund expenses would not affect MNDE’s price at all, unlike selling MNDE.
Redirecting protocol fees to the Council wallet will prevent recurring proposals that would be similar and could induce voting fatigue.
Conclusion
Allowing Marinade Labs to exchange MNDE tokens with the DAO Treasury instead of selling them on the market should benefit the MNDE token and the DAO, while allowing Marinade Labs to fund expenses to grow the Marinade protocol.