I think the most straightforward model would be to distribute rewards according to TVL – a metric that can be easily compared between protocols. In this model, each protocol basically receives an amount of MNDE in proportion to how much mSOL they have in deposits (not quite accurate since I think you would also need to count the USDC in mSOL-USDC pools, for example, since that USDC is providing utility to mSOL). Protocols would not be able to get MNDE emissions beyond the deposits they have been able to gather.
The downside, of course, is that liquidity mining gauges would no longer be used and MNDE loses that part of its utility, making it that much closer to a farming token.
The preface to this post would be an update to my last post:
I didn’t mean anyone have, or will, or are planning to wash trade.
Volume is indeed a key metric of any DEX but we need to consider how big the incentives are.
Orca could wash trade their mSOL-USDC pool. That pool receive ~$610 of incentives per day and traded ~$901k in the past 24 hours, so a 6.8bp “kickback”, out of the 20bp fee, or netting -13.2 bp.
Same for Raydium, 197k volume, $125 incentives, 6.3bp “kickback” plus protocol retention of 3 bp out of 25bp, netting -15.7bp.
Same also for Aldrin, 925k volume, $50.3 incentives, a whooping 0.5bp “kickback” out of 20bp, netting -19.5bp.
What about Lifinity? 1.094M volume, $765 incentives, a 7.0bp “kickback”. Lifinity charges a 8bp fee but keeps 1.2bp to itself according to what @Durden said, so the total, is actually 8.2bp, which exceeds the fees paid and is expected to continue increasing since under the current implementation, Lifinity will acquire more MNDE every day and vote for their own gauge, further increasing the “kickback”.
I don’t see how it’s not alarming if wash trading is actually +EV for a protocol that we have a gauge on, therefore would like some verifiable numbers before we even move on to discussing what the incentives should be.
Again, don’t want to imply that anyone had, will, or are planning to wash trade, but simply to point out the risks of that potentially happening.
I don’t understand the math you are doing where other protocols are netting negative bp and only Lifinity is positive, or how Lifinity keeps only 1.2 out of 8 bp (Lifinity keeps all trading fees if it provides the liquidity).
I also don’t understand how you reach the conclusion that wash trading is +EV for us. It certainly isn’t in any direct way – increasing our volume does nothing to change the amount of MNDE rewards we receive. It would increase fees paid to token holders, but whoever is doing the wash trading is paying those extra fees out of their pocket. So we wouldn’t be getting anything extra from any entity external to the protocol.
Suppose Lifinity were to open its mSOL-USDC pool so that anyone could deposit liquidity and earn MNDE rewards. Lifinity would then function like any other protocol with respect to the gauges.
Under the current model yes. @mint is bringing up concerns moving towards a volume-based model, which I feel is justified. It is just a concern about misalignment of incentives, and not a direct accusation that it occurs, but one worth it for the short run as Lifinity x Marinade figures out a better model (that is not liquidity gauges or maybe even volume-based compensation)
Also want to take the note to thank @mint for the calculations, it was eyeopening. I feel that the lifinity mSOL/USDC pool is way over-incentivized, but numbers is always nice.
I disagree. I suggest having 2 proposals, 1 proposal to vote on removing private gauges (incl. lifinity) and 1 proposal to vote on switching Lifinity to volume-based compensation for the timeframe (with a limit of 3 months maybe) to keep Lifinity rewarded as they figure stuff out.
As mentioned, I would highly prefer if @durden crafts the second proposal.
I feel that this situation creates reasonable concern, to evaluate old proposals. In governance, MNDE vote goes and if MNDE voters vote to adjust terms of a previous grant, it should be allowed. It shouldnt be encouraged and should be seen as a worse-case situation tool, but i think is a quality part of DAO governance.
Technically yes, it will solve the problem and allow Lifinity’s gauge to be re-listed under the new model. However, due to the high amount of concerns raised at this LaaS partnership, I highly suggest using my previously mentioned 2 proposals system. The second proposal can be modified to be something along the lines of Lifinity opens it’s pools instead of volume based compensation. I suggest the proposals go live on Sunday (to maximize weekday voting time), so feel free to take the next 2 days to consult the Lifinity community and craft the proposal.
Some facts some of you might have been missing:
If you look at the original partnership proposal from Lifinity and the modified one per the suggestions from Marinade (links&screenshots below),
Lifinity actually proposed rewards be proportional to volume and be distributed to its ve token hodlers.
Marinade counter proposed that the reward be a fixed amount and locked, plus a gauge for Lifinity which can be voted on
Now calling Lifinity mis-use is simply reneging on Marinade’s own words, only 2 months later of the deal.
Marinade is great for the Solana ecosystem and the MNDE war is the correct way to compete. You should encourage more DAO voting rather than suppressing them. If someone as an individual feels too puny, he/she should join a DAO that matches his/her value and has the power to vote so he/she gets his/her share from the DAO.
Reneging on Marinade’s owner words without a reasonable solution or a compromise both parties accept, plus setting up an example that DAOs are not allowed for mass voting is really shooting yourself in the leg
I will once again note (just like in my original post) that this was what’s suggested and voted. Now that we have a few months of data, this forum post serves as an iteration/improvement over what we have.
I think I have been reasonable in suggesting Lifinity to create another proposal (which is basically a temporary compromise) to reward Lifinity while Lifinity’s DAO creates a more sustainable methodology for both mDAO and Lifinity. I think this is ideal as it solves the matter of hand, creates additional time to create a more sustainable partnership and keeps Lifinity rewarded in the meanwhile.
Unlike the Lifinity supporters on this proposal, I dont feel this is a witchhunt against Lifinity. this is purely trying to solve the problem and move on while keeping all parties rewarded.
I like this. Lifinity pools offer superior yields compared to similar protocols and that would create demand for mSOL. Demand drives Marinade TVL, which aligns with Marinade’s interests. Distributing MNDE would also be better overall, compared to Lifinity keeping all the MNDE and voting on its gauge on the LPs’ behalf because given enough LPs there has to be someone that want to do something else with their share of MNDE emissions (e.g. vote on Lifinity’s liquidity gauge but support another validator of their choice) and they should have the liberty to do so.
I am happy to see protocols getting involved, but everything on Durden’s proposal revolves around the market-making advantages.
If the goal was to get selected parties involved in governance with increasing influence, the DAO could just choose to assign them MNDE allocations or do a token swap periodically - it wouldn’t need to be dressed up in market-making clothes.
As a veLFNTY hodler, I would gladly take a monthly MNDE distribution. Don’t be shocked when the majority of these MNDE tokens end up on the market versus locked up like they currently are. MNDE takes one step backwards towards becoming a farm token as users realize the gauges aren’t actually gauges, and other players will silence your votes 2 months after approving a previous proposal. I wouldn’t be surprised to see more veLFNTY holders also take the same route I do. Simply put, there are other assets that will allow me to benefit more in the long run. If there is no point in holding the MNDE token, don’t be surprised when the price keeps crashing downwards with every week of emissions.
I think it would mostly solve the ongoing problem if anyone could deposit and get paid out the rewards (caveat probably not if there is a long vesting period for the rewards like you alluded to in 1 other post, maybe something in the range of rewards but be distributed in at most a net 45~60 way). it wouldn’t solve the original overpayment issue but whats in the past is in the past.
The whole point to give Lifinity Liquidity Mining rewards is so that I can increase Lifinity’s governance influence Marinade so they can better direct the growth of the protocol vs the current community models that were discussed before.
I am saying the prior use of Marinade was limiting its potential so I want to change that and Lifinity is a good ally to help move Marinade to the next level.
lmao the point of gauges is so that lifinity can take over marinade? ok bud
To the many replies implying it is unthinkable to exit the agreement with lifinity.
If any organization wants to last long term it needs to be able to act nimbly when in a bad situation such as a bad deal or it will die
I personally regret not being more critical of the deal initially publicly but fortunately this is a dao and it has the ability to correct and mitigate it’s past mistakes.
Thanks for the request for input to the above (just saw the tag). Lifinity participating in gauges via an open mSOL-USDC pool, with distribution of MNDE to LPs, just as other DEXs do, would certainly be welcome in my opinion. The more the merrier
The only sticking point where I see a resolution required to a cause of much of the squabbling I’ve seen, would be dealing with the 2m MNDE grant amount. I think all other protocols (certainly Hubble did) kicked off participation in LM by purchasing MNDE either via token exchange program or on the open market. So if it’s about ‘levelling the playing field’, my thought there would be to give some or all of it back to Marinade, and/or distribute MNDE to the Lifinity community, who could of course use it to vote for Lifinity gauges on Marinande or sell it, and then Lifinity can puchase MNDE from its own funds if it wants to vote on Lifinity gauges as a protocol.
mSOL is a derivative of SOL, you can exchange all mSOL in circulation for SOL, permissionlessly, with zero fee, and no slippage just waiting a couple of epochs.
Lifinity is getting $35,000/month from swap feeds in that mSOL/USDC pool. That’s 50% APY, just from the existence of the pool, for Lifinity and LFNTY token holders.
Why are we discussing as this is some costly “service” Lifinity is providing to Marinade?
It is not a service you’re providing, because:
mSOL risk is SOL risk, you’re not absorbing Marinade risk, you’re absorbing Solana risk (the discussion will be quite different if we were talking about MNDE/USDC)
It is in your own benefit for you to keep running the pool, because it is profitable for you. It is not a “job” or a “service” you provide Marinade, and it does not depends on extra payment. Even if we ask you to return the 2mm MNDE and dissolve the original deal, to make another, you will keep the pool running, because shutting down something that’s bringing in $35k/month for Lifinity is against you token holders interest.
TL;DR: I feel like we’re talking here as if the pool were “MNDE/UDSC” and that’s not the case.
mSOL is a derivative of SOL, you can exchange all mSOL in circulation for SOL, permissionlessly, with zero fee, and no slippage just waiting a couple of epochs.
Ever heard of the time value of money? Waiting comes at a cost; it is not free.
Lifinity is getting $35,000/month from swap feeds in that mSOL/USDC pool. That’s 50% APY, just from the existence of the pool, for Lifinity and LFNTY token holders.
What nope said, it’s 5.86% currently. You cited mistaken figures about us in (iirc) the proposal thread too. Please check carefully before making claims like this.
Why are we discussing as this is some costly “service” Lifinity is providing to Marinade?
It appears that you do not understand the nature of the risk we are taking on as a market maker. The 5.86% is by no means guaranteed. We could very well lose money providing liquidity for this pool. If LPing were such an obviously riskless, profitable venture, why are so many protocols incentivizing liquidity with token emissions?
mSOL risk is SOL risk, you’re not absorbing Marinade risk, you’re absorbing Solana risk (the discussion will be quite different if we were talking about MNDE/USDC)
No, we are taking on SOL price risk and mSOL smart contract risk.
It is in your own benefit for you to keep running the pool, because it is profitable for you . It is not a “job” or a “service” you provide Marinade, and it does not depends on extra payment.
Taking this logic to its ultimate conclusion, Marinade should shut down gauges for all DEXs
Technically yes, it will solve the problem and allow Lifinity’s gauge to be re-listed under the new model. However, due to the high amount of concerns raised at this LaaS partnership, I highly suggest using my previously mentioned 2 proposals system. The second proposal can be modified to be something along the lines of Lifinity opens it’s pools instead of volume based compensation. I suggest the proposals go live on Sunday (to maximize weekday voting time), so feel free to take the next 2 days to consult the Lifinity community and craft the proposal.
If we opened our pool, there should no longer be any need to make any changes, right? We would work just like every other protocol. Also, we don’t need to make a proposal to Marinade to open our pool, so if we opened our pool there should be no need for any proposal, correct?
terms are set Lifinity doesnt need to do a damn thing. If you want to push some new proposal you would be on your own to draft and negotioate terms. FYI I will push back on all of them.
I’ve been reading the updates of this post, I’m surprised that I don’t see anybody from marinade taking responsibility from the fact that Lifinity is where it is in terms of Marinade because a proposal was presented, modified, and approved through Marinade governance procedure.
The modifications on the original proposal were asked by people from Marinade, and all this happened just 2 months ago!! Now they are asking to go back to original proposal, or to suspend the whole deal… at least this is what I understand from many of the actors here.
It’s not good for Marinade to go back and forth on their deals, it’s not serious way of working.
Lifinity opened source a piece of software due to the deal that was reached, and that cannot be undone. This kind of deals on web3 are equivalent to contracts, and contracts are to be respected without complains, at least for a reasonable time, and **2 months is not a reasonable time. **
If the problem is that Lifinity will continue to stack MNDE and vote for their gauge…, why not waiting to see if the market fixes this, and MNDE ends up having more value due to this. Like, protocols can invest on MNDE to increase their voting power, and they might want to do this because they get their liquidity by offering a better APY, and nobody from Marinade seem to accept this as an option, or even wait to see if it happens. -
<I feel we are moving towards closing comments, each sides have made their case clear, and its time to let things sit, and wait for the vote>
In aggregate, i feel that everyone has a fruitful discussion (ignoring some overly Lifinity shills and someone who wants me to be censored). It is time to relax, digest the comments, and wait for voting.
I think this is clear when you compare the MNDE incentives that Lifinity gets, to the volume and TVL of the pool. It is definitely over incentivized, with pools with much lower tvl or higher volume getting much lower incentives. Compare Lifinity’s mSOL/USDC pool with whirlpools. However, Durden’s that Marinade DAO should not be looking to make things fair, but letting this be a MNDE stack war is reasonable as well.
If you feel strongly against this, please feel free to propose your own methodology and data. I note that multiple people @mint and Ganyu in the discord have proposed data showing that Lifinity is over-incentivizied, only to be met by “THIS DATA IS WRONG” without any actual data or case presented by the other side.
No one is silencing your votes. You are always free to vote against this proposal. However, the idea that this proposal SHOULD NOT BE BROUGHT UP at all, is actually silencing other’s opinions and votes.
However, a DAO should follow the votes of it’s holders, and if a proposal like this passes a MNDE vote, it is perfect fair for a DAO to modify something. Lifinity has received a 2M MNDE grant that is perfectly reasonable to be used to block this. There is already a 2M MNDE head start compared to others, and is reasonable. As @marky mentions, there are many who feel it is unfair that Lifinity already has 2M mnde. This is more than reasonable payment for the creation and open sourcing of the oracle. One that if you actually ask around, realize that absolutely no one other than Lifinity is using.
While this might be true beforehand, I unfortunately have to disagree now. Proposal #1 would include the removal of the Lifinity mSOL/USDC pool regardless of whether it is open sourced or not. This is due to how many voices in mDAO being for and against the pool, and should be placed to another fair vote. I will propose Proposal #1, once again, you are free to vote no as your votes are not silenced, and I once again suggest @Durdenas it is much beneficial if you craft the proposal, instead of me to win the support of your Lifinity community, to craft Proposal #2 which would involve how Lifinity and mDAO will proceed after this. I will promise to personally abstain from discussing or shitting on the proposal, including voting No. Because once again, I am not someone targeting Lifinity contrary to your community’s belief.
If so, I suggest including these terms in a DAO proposal next time for a minimum viability. The way i look at it, is Lifinity received 2M MNDE, which is fair payment for an open sourced oracle that no one other than Lifinity is using. If you feel this is unfair, vote no.
I also want to add that I am not a member of the Marinade team. Marinade’s chefs suggestion makes sense then, but it is reasonable in my opinion to bring it up for discussion and voted now. This is similar to a review proposal, one that happens all the time. If it was up to me, I would have included the review process in the original proposal. I personally regret not voicing out strongly then. (Lot’s of that going around rn).
