New Referral Program

Tokenomics
#1

Background:
One of the primary ways to increase the value of the Marinade protocol is to increase the amount of SOL staked with Marinade (i.e. increase TVL). I believe Marinade should better utilize MNDE to incentivize and empower all Marinade users to bring additional SOL stakers to the platform driving increased Marinade TVL.

I would like to use the thread to discuss the design of a new referral program.

Current Referral Program
The current referral system is not ideal. It gives the referrer the option to add additional deposit and unstake fees paid by the user being referred. In this case, the new user being referred is worse off than if they had just staked directly without the referral.

New Referral Program
I’d propose implementing a new referral program that allows referrers to earn MNDE based on the amount of mSOL staked by new users they refer to Marinade (via their referral link). To discuss amount allocated and time period of which it is distributed.

One potential way to do it would be allocate 12M MNDE per year (up to a maximum of 60M MNDE over 5 years, which DAO could always vote to end early). The 12M would be distributed pro rata to the referrers based on the amount of net new mSOL they’ve added to the platform. Distributed on a monthly basis (1M MNDE per month). Therefore, if I referred a user who deposited into mSOL and then unstaked or sold all of the their mSOL after 6 months, I would only earn for the first MNDE for the first 6 months and stop earning once they’ve sold.

I would allow anyone to generate a referral link and begin referring. Core team can reserve the right to remove any referrers that are exploiting the system.

Selling/Transferring/Unstaking/Pools
Given mSOL is liquid, if the user sold, unstaked, or transferred their mSOL from the initial address that was staked the mSOL, then the referer would no longer continue receiving referrals (until that address re-acquired or re-staked).

It also becomes challenging to track once mSOL is deposited into one of the defi pools, so the referrer would not earn MNDE for mSOL that the users they have referred have deposited into defi pools. I believe this is ok because (a) currently only 18% of the mSOL is deposited in defi pools so this works well for 82% of people and (b) the defi pools have their own incentives via the liquidity gauges that they can share with users depositing in their pools.

Additional Ideas
An additional idea would be allowing referrers to share a % of their MNDE rewards with the users they refer.

Technical Requirements
I’ll let the team comment on the technical requirements.

This is an initial post to get the discussion started and hopefully refine it into a formal proposal that can be voted on. Welcome comments and help to build this into an actionable proposal.

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#2

Hello @confusedcollector and thanks for this detailed proposal.

I do agree with a lot of your points regarding the current referral program.
I also think that the path you’re exploring with MNDE rewards in an interesting one, but I am nonetheless not fully convinced that a better referral program would be such a catalyzer for Marinade’s TVL.

Do you have any data or similar examples of referral programs that greatly contributed to the growth of a protocol? You mention Lido, are there results with their referral program on Solana public?

I like the fact that what you suggest make it really interesting for people to jump on the opportunity and quickly benefit from it as there is a pool of MNDE to be shared, but if it ends up being used very little, Marinade would quickly be overpaying people for a non-existent growth, how do we solve such situations?

I definitely think it’s interesting to push the discussion and iterate on the idea, but I think that before prioritizing this project over others for Marinade, we’d need very strong reasoning that it would pay out in terms of TVL too.

2 Likes
#3

generally feel that directed stake + bribes would be a better path for referrals to go

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#4

Good points.

Here is some information on the LIDO rewards: Referral Program for Lido Ethereum June 8, 2022

Rollbit is an example of a protocol with a strong referral program that has seen very significant growth from referrals.

Agreed, I think the rewards need to adjust based on the amount of net new TVL brought to the platform and how long it stays. Requires some more analysis/thought to develop mechanism to avoid overpaying (i.e. such that if net new TVL from referrals is not increasing then rewards aren’t being paid out).

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