Abstract
This proposal seeks 12.5 million MNDE tokens from the Marinade DAO treasury and the unspent 10,694,714.13 MNDE tokens from the Marinade Earn — Season 3 campaign to fund the continuation and expansion of liquidity, adoption, and other strategic efforts for mSOL under a campaign entitled ‘Marinade Earn – Season 4,’ a successor to the Season 3 campaign.
Building on the successes of Season 3, which significantly enhanced mSOL’s on-chain liquidity profile and competitive positioning, this initiative broadens the scope to include DEX liquidity maintenance, expansion into lending markets, and other strategic initiatives to further entrench mSOL’s dominance in the Solana ecosystem and ensure institutional-grade depth and DeFi utility competitiveness in the SOL liquid staking market.
Background
Commanding a TVL of more than 5.57M SOL (~$1.046B at the time of writing), Marinade Liquid (mSOL) has proven to be the flagship product of the Marinade DAO. Now generating ~$11.6M in annualized, top-line revenue, mSOL has demonstrated clear PMF, positioning itself to capitalize on capital inflows into the Solana ecosystem that will gravitate toward the highest SOL staking APY.
By virtue of SAM and PSR, mSOL staking APYs have consistently outperformed that of competitors like jitoSOL, as seen above, other centralized providers like Figment, Coinbase, Binance, and even other LSTs like bSOL, hSOL, jupSOL, and others.
To solidify Marinade’s dominance in the SOL LST market, the Marinade DAO has undertaken a multitude of strategic initiatives such as ‘Marinade Earn Campaigns’ to deepen mSOL’s on-chain liquidity (depth), as the biggest appeal of mSOL and SOL LSTs in general is composability (instant exit liquidity and DeFi integrations).
The most recent Marinade Earn Campaign, titled ‘Marinade Earn — Season 3’ was a resounding success. While allocating a budget of 25M MNDE over 3 months to carry out various strategies to deepen mSOL’s on-chain liquidity — allocating 50% of the requested budget, i.e., 12.5M MNDE tokens to deepen the liquidity of the mSOL-SOL vault on Kamino, 30% of the requested budget, i.e., 7.5 million MNDE tokens to deepen the liquidity of mSOL vaults on Kamino paired with already established and upcoming Solana tokens, and the 20% of the requested budget, i.e., 5 million MNDE tokens to carry out a strategy on Solend to make looping from the Meteora mSOL-SOL LP more profitable than with current vanilla mSOL carry trades — the Marinade DAO spent a mere 14,116,178.73 MNDE over 7 months (i.e., a little more than half the budget in more than 2x the timeframe) while achieving solid results.
In terms of mSOL’s on-chain liquidity, these 7 months (from mid-June, 2024 to mid-January, 2025) proved to be immensely fruitful, as seen above, allowing the Marinade DAO to:
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Scale the liquidity for the mSOL-SOL Raydium pair on Kamino from ~8.3K SOL to ~64.43 SOL, marking a ~676.27% increase in real (SOL) terms, and ~860.8% in nominal (dollar) terms, going from ~$1.25M to $12.01M in liquidity.
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Maintain an average level of 118,968.5 SOL ($19,577,094.34) worth of liquidity for the mSOL-SOL Raydium pair on Kamino, marking a 1333.9% increase in real terms and a 1466.17% increase in nominal terms from inception levels of liquidity.
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Scale the liquidity for the mSOL-SOL Meteora pair on Save Finance (previously Solend) from ~23.9K SOL to ~74.6K SOL, marking a ~212% increase in real (SOL) terms, and ~286.1% in nominal (dollar) terms, going from ~$3.6M to ~$13.9M in liquidity.
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Maintain an average level of 101,599.98 SOL ($16,844,717.48) worth of liquidity for the mSOL-SOL Meteora pair on Save Finance (previously Solend), marking a 325.196% increase in real terms and a 367.909% increase in nominal terms from inception levels of liquidity.
This significant deepening of on-chain liquidity had the consequence of allowing mSOL to flourish in terms of volume, by nature of the more efficient and liquid markets Marinade Earn — Season 3 brought.
As seen below, since the inception of the campaign, there have been 104 instances (days) of mSOL having the highest volume relative to TVL (volume-TVL ratio), with jitoSOL, bSOL, and jupSOL having 15, 111, and 84 instances respectively, showcasing the extremely competitive liquidity utilization of mSOL relative to other SOL LST issuers — in other words, for a significant part of the campaign, mSOL’s volume-TVL ratio surpassed that of jupSOL, bSOL, and jitoSOL. Normalizing for volatility using 30d volume-TVL ratios, there have been 103 instances (days) of mSOL having the highest 30d volume relative to TVL (30d volume-TVL ratio), with jitoSOL, bSOL, and jupSOL having 0, 120, and 62 instances respectively.
In the 7 months that Marinade Earn — Season 3 ran, the emissions breakdown was as follows:
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9,766,285.81 MNDE — distributed to the mSOL-SOL Raydium pair on Kamino.
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4,139,000.06 MNDE — distributed to the mSOL-SOL Meteora pair on Save Finance.
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400,000 MNDE — distributed to active ranges on the mSOL-SOL pair on Raydium.
Over these 7 months, there were a total of 17 reward distribution tranches to partners, with ~42.8% of the total MNDE budget for the campaign being saved, bringing the Marinade Earn — Season 3 budget surplus to 10,694,714.13 MNDE tokens.
In order to continue on this positive trajectory, we propose the DAO approve a campaign entitled ‘Marinade Earn — Season 4,’ which will broaden the scope undertaken by Marinade Earn — Season 3 campaign and utilize the surplus from the previous Earn Campaign as well as an additional 12.5M MNDE tokens.
Motivation
This proposal will seek to utilize the remaining MNDE tokens from the Marinade Earn — Season 3 campaign and unlock an additional 12.5M MNDE tokens to continue growing mSOL usage and liquidity in the Solana DeFi ecosystem as part of a new campaign entitled ‘Marinade Earn — Season 4.’
Specifications
If approved, the campaign will have the following scope:
1. DEX Liquidity Maintenance
1.1 Continue to ensure Marinade’s dominance in DEX liquidity by maintaining deep liquidity pools across major DEX platforms.
1.2 Ensure competitive spreads and depth for all mSOL holders, including institutional entities.
2. Expansion into Lending Markets
2.1 Initiate the establishment of isolated mSOL lending pools across prominent lending platforms.
2.2 Design and implement incentive schemes aimed at increasing total value locked (TVL) in these isolated pools, thereby building up sticky mSOL TVL and making mSOL leverage capacity expand.
2.3 Strategically attract SOL deposits from across Solana DeFi into mSOL’s safer, isolated lending pools.
3. Improve Strategic Presence
3.1. Extend Marinade’s influence beyond DEXs and lending markets to include re-staking platforms, derivatives, and general trading protocols as traction and market stability are established.
3.2. Ensure Marinade’s continued relevance and competitiveness in the DeFi ecosystem to counteract potential market share gains by competitors like Jito.
Said differently, we want Marinade Earn — Season 4 to continue the strategic initiatives elucidated in the previous campaign, including subsidizing mSOL-based LP collateral carry trades, DEX LPs across high-impact venues including Kamino, and other such initiatives including strategic mSOL LP pairing partnerships to ensure competitive liquidity, especially as mSOL gets more adopted with institutional entities, but also push on other avenues such as lending markets where mSOL could be more competitive relative to competitors like jitoSOL.
One area of focus is on isolated lending markets for mSOL on avenues like Kamino, as enticing SOL lenders to lend into such pools could result in higher SOL capacity for mSOL carry trades, simply due to the fact that more risk-averse SOL can flow into this safer mSOL isolated pool due to the reduced trust assumptions and risk of bad debt due to cross-contagion of collateral. It also becomes less risky for the underlying lending market to assign higher LTVs to mSOL, enabling mSOL carry trades to be significantly more profitable than the status quo, as seen below (having an isolated market with a bump up of 25% in mSOL’s LTV can result in 2x the current yields in the main Kamino market).
And as mSOL’s yield continues to be higher than that of other SOL LSTs, these isolated lending markets can become the de-facto place for SOL LST carry trades, with mSOL acting as the substrate and subsequently driving TVLs for Marinade Liquid (every net-new mSOL LST holder who wants to leverage up will directly increase mSOL TVL, as the process of borrowing SOL to top up mSOL collateral will route through the mSOL mint contract).
Furthermore, as these isolated lending markets are established, loans are originated, and we build up sticky mSOL holders and depositors, the Marinade DAO can further broaden the scope of this campaign to compete with other SOL LSTs on restaking platforms, trading platforms, and other potential mSOL sinks to drive TVL there too.
Impact Analysis
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User Impact: Users will experience improved / sustained liquidity depth across DEXs, ensuring a seamless UX for both retail and institutional holders. Additionally, mSOL holders will be able to tap into increased SOL capacity on lending markets to enter lucrative, leveraged carry trades.
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Protocol Impact: By expanding mSOL’s presence across lending markets and maintaining competitive liquidity on DEXs, the protocol’s utility and adoption will grow, strengthening its market share and top-line revenue.
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Funding Request: 12.5 million MNDE is requested to be allocated to support the campaign’s initiatives along with the unspent 10.7 million MNDE from the previous campaign.
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Timeline: The campaign would be expected to launch shortly following a potential approval from the Marinade DAO and span around 3 months.
Conclusion
Marinade Earn — Season 4 represents a pivotal next step in strengthening mSOL’s market position and adoption across DeFi. This campaign will be synergistic with Marinade’s institutional strategy by ensuring adequate liquidity depth with tight spreads for institutional mSOL holders, enabling seamless exits, and bolstering the perception of mSOL’s safety based on on-chain liquidity. Furthermore, the broadened focus to include lending markets in addition to DEXs represents a significant evolution from Season 3’s mandate, aligning Marinade with a more comprehensive DeFi strategy, ensuring Marinade Liquid remains a cornerstone of the Solana ecosystem.
We’re keen to hear your valuable thoughts, Chefs!