Abstract
This proposal does two things. First, it deepens MNDE on-chain liquidity by seeding the existing 0.3% fee MNDE-mSOL pool with 10M MNDE from the DAO treasury. Second, it activates an MNDE Staking Rewards Program funded by 10% of protocol revenue, used to buy MNDE on the open market and distribute it to active MNDE stakers in Realms.
Together these address two problems: thin MNDE on-chain liquidity, and the absence of a concrete reason to stake MNDE beyond governance rights.
Motivation
The liquidity problem
MNDE on-chain liquidity is thin. Thin liquidity widens slippage and pushes real volume away. This was raised directly on the forum in “Building Stronger Liquidity,” and the diagnosis there is correct. The MNDE market is underfunded relative to where we want it.
MNDE needs a reason to be staked
Today 49M MNDE, worth roughly $1M, is locked in Marinade Realms. That stake earns governance rights and nothing else. A reduce-supply or burn approach returns value diffusely and gives no individual staker a reason to stay staked.
The stronger model, raised by berkantsc in the same forum thread, is buy and distribute. Use protocol revenue to acquire MNDE on the open market, then distribute that MNDE directly to the wallets that stake and govern. Stakers can claim and restake. This ties MNDE staking rewards to real protocol revenue, and concentrates the benefit on active DAO participants rather than the entire float.
Why now
Protocol revenue is running at roughly 3,000 SOL per month. That is enough to fund a meaningful, sustained buyback-and-distribute program without straining operations. The longer MNDE liquidity stays thin and MNDE staking stays unrewarded, the weaker the case for holding and governing with MNDE. We have the revenue to fix both today.
Definitions
For the purposes of this proposal:
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Protocol Revenue: All fees collected by the protocol, measured in SOL terms per the Council’s standard accounting.
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MNDE-mSOL Pool: The existing on-chain MNDE-mSOL liquidity pool with a 0.3% trading fee.
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MNDE Staking Rewards Program: The program established by this proposal, under which MNDE acquired through open-market buybacks is distributed to eligible MNDE stakers.
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Eligible Staker: A wallet meeting the eligibility criteria defined in section 2.
Proposal
If approved, this proposal would put in place the following.
1. Seed MNDE liquidity
Seed the existing 0.3% fee MNDE-mSOL pool with 10M MNDE from the DAO treasury. This puts protocol-owned MNDE to work as on-chain liquidity and improves market depth from day one.
2. Activate the MNDE Staking Rewards Program
Establish a program that distributes bought-back MNDE to MNDE stakers in Realms:
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Distributions are pro-rata assigned daily to staked MNDE balance.
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Distributions occur quarterly, at the end of each calendar quarter.
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Stakers may claim and restake distributed MNDE.
Eligibility. To receive distributions, a wallet must:
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Hold MNDE staked in Marinade Realms at the distribution snapshot.
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Have cast at least one governance vote in the trailing 12 months, demonstrating active participation in the protocol.
Eligibility is binary. Wallets that meet both criteria share each distribution pro-rata to weighted staked MNDE balance.
3. Allocate 10% of Protocol Revenue to buyback and distribute
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10% of Protocol Revenue is allocated to programmatic open-market MNDE buybacks.
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All MNDE acquired this way flows into the MNDE Staking Rewards Program and is distributed under section 2.
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Buybacks are executed programmatically on a regular schedule to minimize price impact and discretion.
4. Reporting
The Council shall publish a quarterly report covering buyback volumes, average acquisition prices, MNDE distributed, the number of eligible stakers, the Estimated MNDE APY for the period, and MNDE-mSOL pool depth and volume.
Expected economics
At current run rate the program funds itself from a small slice of revenue and produces a competitive Estimated MNDE APY on staked MNDE.
| Input | Value |
|---|---|
| Protocol Revenue | ~3,000 SOL / month (~36,000 SOL / year) |
| Buyback allocation | 10% = ~3,600 SOL / year |
| Buyback value | ~$240,000 / year |
| MNDE acquired and distributed | ~12M MNDE / year |
| MNDE currently staked in Realms | 49M MNDE (~$1M) |
| Estimated MNDE APY | ~24% |
Distributing roughly 12M MNDE per year to the 49M MNDE staked today is an Estimated MNDE APY near 24%. These figures scale directly with Protocol Revenue. If revenue rises, distributions and pool depth grow with it. If revenue falls, the program scales down proportionally and never competes with operations for a fixed amount.
Rationale
Why seed the pool directly from the treasury
Seeding the MNDE side from the treasury puts protocol-owned MNDE to productive use as on-chain liquidity. It also avoids a large one-off market buy that would move price against the protocol before the liquidity is even in place.
Why distribute instead of burn or reduce supply
Reducing supply spreads value across every holder, including those who do nothing. Distributing to stakers concentrates value on the wallets that lock MNDE and govern the protocol. That is the behavior we want to reward. It also gives a concrete, claimable reason to stake, which deepens governance participation and tightens float.
Why require a governance vote
Tying eligibility to a governance vote in the trailing 12 months rewards active participation rather than passive farming. It directs MNDE rewards toward the people actually governing Marinade, which is the behavior the program exists to encourage. This reflects the buy-and-distribute logic raised in the forum discussion.
Why a flat 10% of revenue
A flat percentage of revenue is simple, predictable, and self-scaling. It needs no buffer, no reserve, and no per-epoch discretion. It cannot crowd out operations because it is a fixed fraction, and stakers can estimate expected rewards directly from public revenue figures. The percentage is a parameter and future proposals can revisit it as economics evolve.
Conclusion
This proposal deepens MNDE liquidity by seeding the existing 0.3% pool with 10M MNDE, and gives MNDE a concrete reason to be staked through a revenue-funded buyback-and-distribute program reserved for active governance participants. Both changes are funded from existing revenue, scale automatically, and are reported each quarter.
If approved, the seed is deployed and the first buyback cycle begins at the start of the first full quarter after on-chain implementation, with the first distribution at that quarter’s end.