MIP 3: Enhancing MNDE Utility by Integrating with the SAM

Tokenomics
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#1

Abstract:

Marinade Finance proposes to integrate the MNDE Directed Stake mechanism with the Stake Auction Marketplace (SAM), unifying stake distribution, enhancing the utility of the MNDE token and most importantly, increasing APY to stakers. Under this proposal, the amount of MNDE tokens directed towards a validator will directly influence the cap on how much stake they can receive from the SAM. The default stake cap will remain at 2% of Marinade’s Total Value Locked (TVL), with the potential to increase based on MNDE directed stake.

Background:

Currently, MNDE Directed Stake allows MNDE token holders to allocate stake to specific validators independently of the SAM. While this provides utility for MNDE tokens, it creates fragmentation in the stake distribution process. Validators must engage with both systems to maximize their stake, leading to complexity and inefficiencies. Notably, some validators receive stake while offering non-competitive rewards to stakers.

Proposed Changes:

  1. Unify Stake Distribution through SAM:
    • Remove the standalone MNDE Directed Stake system.
    • Distribute 100% of Marinade’s TVL exclusively through the Stake Auction Marketplace.
  2. Link MNDE Direction to Stake Cap in SAM:
    • Implement a mechanism where the proportion of MNDE tokens directed towards a validator increases their maximum potential stake from the SAM.
    • Default Stake Cap: Validators will maintain a default stake cap of 2% of Marinade’s TVL.
    • MNDE-Enhanced Stake Cap: Validators can increase their stake cap beyond the default based on the amount of MNDE directed to them. This also effectively fights against sybil attacks of some validators participating in the auction.

Mathematical Formula for Stake Cap Calculation:

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Explanation:

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Example Calculation:

Screenshot 2024-10-22 at 13.52.54
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Result: The validator’s maximum stake cap increases from 2% to 3% of Marinade’s TVL.

Rationale:

  • Simplification:
    • Unified Platform: Consolidates stake distribution into the SAM, reducing complexity.
    • Efficiency: Streamlines processes for validators.
  • Incentive Alignment:
    • Validator Engagement: Continue encouraging validators to participate actively in the MNDE community.
    • Community Growth: Continue fostering a collaborative ecosystem between validators and token holders.

Impact Analysis:

  • For Stakers:
    • Increased APY: Attract more stakers by collecting more bids from entire Marinade’s TVL being staked to Stake Auction Marketplace winners, resulting in the most competitive APY on the market.
  • For Validators:
    • Stake Growth Potential: Ability to increase stake cap beyond the default 2% by attracting more MNDE.
    • Community Involvement: Motivated to engage with MNDE holders to enhance their stake cap.
  • For MNDE Holders:
    • Greater Control: Directly influence which validators receive increased stake caps.
    • Enhanced Utility: Adds tangible benefits to holding and directing MNDE tokens.

Conclusion:

By integrating MNDE Directed Stake with the Stake Auction Marketplace, Marinade Finance aims to create a more cohesive and efficient staking environment. The default stake cap remains at 2% of Marinade’s TVL, and validators can increase this cap by attracting MNDE tokens directed towards them, as calculated by the provided formula. This change is expected to directly increase APY delivered to stakers, benefit validators, MNDE holders, and the overall network by enhancing utility and simplifying processes. We encourage community feedback to refine this proposal and ensure its successful implementation.

#2
  • Remove the standalone MNDE Directed Stake system.
    Why do you guys think this is beneficial? The main allocated validators with MNDE are Zoidberg, Solanahub, SuperteamDE, Simpdigit and Hanabi Stake. There are big accounts which suggest early allocation and that the Validators themselves are holding these MNDE tokens. The incentive to increase the cap is nothing compared to the current utility.

This action will create a sell pressure of around 90M MNDE allocated to Validators and associated with the recent emission of more than 100M MNDE in the last months will drive the price down.

I suggest not to change the MNDE allocation of 10% and discuss other factors like max inflation commission and MEV commission.

#4

Thank you for sharing your concerns regarding MIP 3. I understand that removing the standalone MNDE Directed Stake system raises questions, especially about its impact on validators currently holding MNDE tokens. This proposal aligns with the objectives stated in the new delegation strategy (SAM) previously voted for, which aims to deliver the best yield for stakers.

By integrating MNDE utility with the Stake Auction Marketplace, I believe we can eliminate unnecessary system complexities caused by separating MNDE Directed Stake from the SAM auction. This unification simplifies the staking process and enhances efficiency for both validators and stakers.

Furthermore, increasing the delegated amount has been a recurring feedback from the validator set. Validators actively participating in SAM can leverage the new MNDE utility to secure more stake, addressing the desire for higher delegations. While concerns about potential sell pressure are valid, the intention is to create a more dynamic and rewarding ecosystem that benefits all participants through improved yields and network performance.

#5

Then do it as in a futarchy and let’s use the MNDE price as the objective function. I believe people will bet that it will drop. I would.

You’re removing the most important utility of the Token.

If you want to increase the APY, maybe change the cap from 7%/100% to 5%/10% inflation/MEV.