Mis-use of Marinade gauges by closed AMM

Do they vote on what to do with the MNDE? can they move their share to their wallet?

Not on an individual basis, no (if they could, it would just be equivalent to individuals holding the MNDE). But if the DAO as a whole votes to distribute the MNDE to individual holders, we will of course do that.

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This is laid out really well and I think we should consider the benefits of emissions being instantly locked and distributed in a unique way instead of them going onto the market to holders who can dump it.

Lifinity did everything right with their proposal and it would not be good to create new proposal that targets only their use case.

I would be more supportive of capping gauges based on some fair and comparable metric.

Disclosure: I’m staking a Flare.


Fully agree with Durden and how Marinade is being used. Marinade will be a service provider in web3 to defi protocols like Lifinity. Only reason it looks negative is there arent enough other platforms doing the same. Lifinity is ahead of the curve and I want to make sure they keep it as their values and mission is to build long standing infrastructure inwhich web3 will build off of.

If there is more discussions of targeting Lifinity it will just make me purchase more and allocate more to them. This is a permisionless environment so we need to start playing by those rules and not trying to turn Web3 into something that makes us comfortable and feel secure.


The issue is the incentives are not aligned and that is ultimately what is bad for Marinade DAO. On a normal DEX MNDE rewards go to the LPs, they are the ones who directly contribute their assets to earn MNDE rewards, if they stop, they stop earning MNDE rewards, and it’s their own money that they put at stake, they are directly holding mSOL. They have every incentive to act in a way that is also beneficial for Marinade.

Meanwhile LPs on Lifinity work completely different, calling the token holders “indirect LPs” is sugarcoating. Those token holders do not have a direct stake in the liquidity, it’s not their assets on the line, in an extreme case they are incentivized to pursue Lifinity’s interest over Marinade’s.

I think we need to make sure MNDE rewards are given out to users whose incentives are aligned with Marinade’s, which is not the case with Lifinity at the moment.

Also keep in mind that TVL on truly decentral DEXes like Orca and Raydium has been built up for way cheaper.


Sorry to be blunt but this topic is comical

If you want more impact on guages hold more or buy more MNDE to vote

Crying because another protocol operates differently than you in Web3 is funny

Ive held MNDE since 86 cents as i truly believe in mSOL and Marinade. Truth is traditional LPs based on mining have no loyalty but im not complaining. It is what it is.

Lifinity has done what was expected of them and more as a Marinade partner. I am a holder and we have a very tight community. I look forward to receiving my MNDE after unlocks if we decide to vote that way.


I understand your point here, but how does Lifinity help grow mSOL TVL.

I currently see it that 10% of MNDE incentives are going to Lifinity for $500K TVL. How does “better” liquidity that you call it, drive perpetual TVL growth for Marinade, as you call it?

Is it through platforms like Port?

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I guess there are two different issues being discussed here.

First issue, raised by Batman is that, according to Marinade policy, MNDE rewards should incentivize people to use mSol and decentralize MNDE ownership. The idea is that people would be incentivize to stake Sol in form of mSol to earn MNDE. Not sure if Linfinity model helps with this.

Second issue, brought up by Durden response is about benefits that Linfinity brings to Marinade by holding MNDE instead of dumping it like most retail users. It seems to me that the current model of MNDE valuation, through voting power for gauges allocation, generates more incentives for protocols and validators to hold MNDE than for retails users. This is not necessarily bad, but if we want that more retail users hold their MNDE, perhaps we need to think on incentives for that., like staking octopus and earning MNDE APY on them.


Lifinity has every reason to want Marinade to succeed. Can you provide a concrete example where this supposed incentive misalignment would cause Lifinity to act in a way that damages Marinade?

Like LPs on other DEXs, Lifinity has exposure to both mSOL and MNDE. If their price suddenly went to zero, what do you think would happen to the price of Lifinity’s tokens? By this reasoning, it should be abundantly clear that our token holders also care about Marinade succeeding. If they didn’t, they would likely be demanding that we distribute MNDE rewards to them so they can dump it.


What I was saying in my earlier post is that neither Lifinity nor any other protocol is driving perpetual TVL growth for mSOL. When there’s a limited amount of MNDE to be given out, in aggregate it can only incentivize a certain amount of deposits across all protocols. It cannot continue to increase mSOL adoption in perpetuity; adoption plateaus based on the available APRs.

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Liquidity is an important consideration for those who want to be able to quickly enter/exit positions, so at the very least we make staking on Marinade more attractive by making mSOL more liquid.

In the current model, individuals are disincentivized from locking MNDE and voting because even if they vote for a gauge that they are using, they only receive a small portion of the additional MNDE gained by the gauge through their vote.

For example, Tyler is a mSOL-USDC LP on Orca and comprises 1% of the pool. He locks his MNDE and votes for the pool, increasing the gauge’s allocation by 100 MNDE. Unfortunately, Tyler will only receive 1 of those 100 MNDE because he only has 1% of the liquidity. The other 99 MNDE go to the other LPs, even though they didn’t contribute by locking MNDE and voting.

This can be solved if all LPs lock their MNDE rewards and vote – in this case, all LPs will receive MNDE rewards exactly proportional to the amount of liquidity they provide. But this is of course extremely difficult to achieve since there is no incentive to do so, nor is there a mechanism by which to force LPs to do so.

Lifinity achieves this by making the decision on behalf of all LPs (token holders), at least for the time being, until token holders vote otherwise.


I think we can all agree that we want a healthy setup where MNDE has strong utility in a permissionless and decentralized way.
However, I am concerned the current setup isn’t optimal for that:

As someone representing two emerging protocols who have been looking into participating in MNDE governance it is honestly quite a turnoff to acquire and continuously maintain enough MNDE for a competitive voting power, if there are other big entities that can exponentially increase their voting power every epoch for free through the feedback loop described earlier.
As a new protocol we are already starting way behind big established voting powers like Solend, Lifinity, et al. even without the free exponential growth.
Why should we even bother trying, if we know that sooner or later there will be a monopoly on voting power that cost nothing to build up except for enough epochs to pass? There is just no way you can compete with that.

This is of course anecdotal and we are still relatively small, but it is just a matter of time until today’s key players in the ecosystem like Solend, Orca, etc. will end up being in a similar situation as us. There is no point in participating in bribe wars if there are parties out there that can amass exponentially growing voting power for free via the voting feedback loop.
This will lead to MNDE losing significant utility and prevent new participants to come in.


You are highlighting the root of issues with broad investing. Governance should not be a passive investment rather it itself is a utility that you need to be using constantly to get the most value out of it. If you are not continually investing in the growth and using revenue to increase your governance position then you will be left in the dust by those who do. That’s the way it should be because we don’t want inactive people draining value generated by the protocol we should be actively incentivizing MNDE holders to grow the protocol.


I think what you describe is dangerous territory. Just imagine Solend, Orca, Raydium, etc. would follow this approach and stop giving out MNDE rewards to LPs and instead hodl it for themselves to maximize their governance position. All their mSOL TVL goes to 0, Marinade is screwed big times, but the governance bribe wars are in full swing over who can ponzi out the most value from the MNDE gauges. Don’t think that’s what we want either.

What you describe makes sense if the investment is in growth in users who are actively contributing to mSOL ecosystem. It makes sense that protocols should allocate part of the revenue generated through the users who came for the emitted MNDE rewards back into getting more MNDE rewards to attract more users, but the key point for Marinade is that these users need to benefit the mSOL ecosystem and not just buy into a MNDE ponzi.

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Lifinity got their MNDE through a grant proposal. There is now a grant committee at Marinade and your protocol could apply for it if it was relevant to Marinade.


I can’t stress this enough, but I strongly believe that this proposal risks heavily damaging the reputation of the Marinade DAO itself, but also of the value of the LM gauges, and the MNDE token in general.

To respond to your comment though, I think I’d rather imagine a scenario where the other Solana protocols actively participated in Marinade governance. I also wouldn’t be against seeing something like a MNDE treasury swap with native DEX tokens (RAY, ORCA, SBR, etc) allowing Marinade DAO to become a stakeholder in the other protocols and at the same time diversifying its own treasury.

I don’t see why Marinade DAO should punish Lifinity for taking time to participate in governance. Not to mention their following through with the offer to lock up the MNDE tokens so they aren’t sold onto the open market as most other LM rewards are.

Can’t similar arrangements be made with other protocols that would allow them to be more competitive in the weekly gauges? Couldn’t every other Solana protocol come to the Marinade DAO forums with a proposal and jump through the governance hoops needed to get their desired proposal passed just as Lifinity’s team and community did?


Agree that we want a healthy setup for MNDE! :slight_smile:

It’s a mistake to think that Lifinity gets MNDE for free. Lifinity is providing liquidity, which entails both price risk and impermanent loss risk. On other DEXs, these risks are assumed by LPs, which are external to the protocol; the protocol takes on no risk. In the case of Lifinity, the protocol itself provides the liquidity and thus takes on the risks. Just as LPs on other DEXs are compensated for the risk with MNDE rewards, Lifinity is also compensated for the risk with MNDE rewards.

Originally, Marinade manually determined how much MNDE emissions went to each protocol. The switch to gauges was made for a variety of reasons, but ultimately it was seen as a superior model. Most people are aware that it is an emulation of Curve, which has proven to be extremely successful. The model is designed for protocols to acquire tokens and vote for their own gauges (as opposed to individuals being incentivized to lock and vote, for example, as explained in my previous post). And that is precisely what Lifinity is doing.

This will lead to MNDE losing significant utility and prevent new participants to come in.

On the contrary, CRV gained significant utility through its gauges, even as each protocol showed differing levels of willingness to purchase CRV to participate in voting. Some early projects saw the benefit of buying and locking CRV, and as time passed more projects joined in. This only accelerated with the introduction of bribes, and if I’m not mistaken Marinade is currently building out this functionality for MNDE.

Through the discussions here and elsewhere, I am getting the sense that some protocols prefer the former method of the Marinade team manually determining emissions. This way, there is no need for protocols to make an investment in MNDE and they can receive assets to incentivize usage of their protocol for free! Or they are fine with the gauges…as long as no protocol accumulates MNDE so that the share of rewards for protocols that don’t accumulate decreases over time. But if there’s some sort of implicit agreement that protocols can’t accumulate MNDE, then we are just anchoring to some arbitrary distribution based on the initial amount of MNDE that protocols happen to have. I see no good reason to do this. On the contrary, it seems obvious to me that Marinade should want protocols to accumulate their token.

Finally, I want to mention that any protocol can do what Lifinity is doing or similar if they are willing to put in the effort. For example, protocols can create a system where users’ MNDE rewards are locked until a future date, and in the meantime the MNDE is locked and used to vote for their own gauges. Get creative!


Whenever market conditions get tough, market makers / LPs are incentivised to withdraw their funds. On a regular DEX I stop earning MNDE rewards the second I do so, and also my rewards are now up for grabs for other potential LPs.

With Lifinity that is not the case, Lifinity can stop market making when conditions are bad, but still receive MNDE rewards, there is no punishment for withdrawing liquidity. Why would Lifinity care to increase the liquidity when market conditions are bad if they get the rewards anyways?

If MNDE and mSOL goes to 0, sure LFNTY holders will see some impact but nowhere close to the impact real LPs would see, so many more assets go into LFNTY.


To clarify for people who weren’t around for the proposal: part of Lifinity’s partnership proposal included requesting 2M MNDE from the DAO, received as an NFT, which Lifinity committed to holding for at least a year.

While they called it a “grant” in the proposal, it was meant as a replacement for the volume-based fee on their original proposal, and outside the parameters that the grant committee can consider. Any protocol wanting a similar amount would still need through a governance vote.

Update: to clarify… a proposal has passed allowing us to form a grant committee. We have yet to form it, but I plan to get the discussion going soon.

@Hao You can read more about the grant committee and the parameters where it can assign MNDE without going through a governance vote on this proposal.


even more a reason to stop the feedback loop, since more MNDE to Lifinity does not mean more liquidity.
If e.g. Orca controls 100% of MNDE votes, there will be whatever TVL the total MNDE rewards allow for on Orca.
If Lifinity controls 100% of MNDE votes, there will be 1M TVL on Lifinity…


I think you and @Durden miss the point slightly here. The issue is not that protocols like Lifinity get big grants and hold a lot of MNDE, the issue is that they can use all their MNDE to vote for rewards, collect all those rewards for themselves, and use them to vote for even more MNDE in the next cycle leading to this exponential feedback loop.
If every protocol would do this, you get the MNDE ponzi that @Hao is describing, without driving any actual value to mSOL/mDAO.

To make things concrete: Let’s say Orca would just decide to stop showing their mSOL/USDC whirlpool on the website, put 1M of their own money in it, not allow any deposits, collect all MNDE rewards, use them to vote for more rewards next cycle.
Why would mDAO want Orca to do this, what is the benefit for Marinade that Orca is switching to this? Surely you can see that would be an absurd move of Orca. Yet this is exactly what you are suggesting here that Orca should be doing “just as Lifinity’s team and community did”