I wasn’t sure if this is the correct place to put this so let me know if I should move it.
I wanted to open a discussion about burning some of the illiquid MNDE. At present Marinade has a market cap of around $8 million but a FDV of around $41 million. More precisely, only 200 million MNDE have been released with 800 million illiquid.
It seems to me this may be considered a risk by future potential investors. That they see a large illiquid holding and think that there could be a risk of debasing the existing liquid MNDE in the future through emissions.
Wouldn’t it be wise to burn a portion of these? This would increase the market cap, reduce the FDV, and alleviate future investors perceived risk of debasing MNDE via emissions.
It would also increase existing MNDE holders token value through reducing the potential future debasement of their MNDE.
Assuming this could be done by a mDAO vote if community was supportive.
Just interested to open up the discussion.
UXD protocol did this token burn after a positive community vote: https://x.com/uxdprotocol/status/1517004273191587841?s=46&t=Fzo9LrFccXrbWVRxP-jedw
There have been variations of this discussion over the last couple years (and I’ve asked it myself!) since it’s true Marinade has a High FDV and most of the tokens aren’t on the market, and given the release schedule these tokens might not be fully released for 5+ years.
Just noticing some other protocols that have done this in the past it seems to be a short-term bandaid on the price. If we continue to communicate and demonstrate that MNDE won’t be distributed if TVL doesn’t grow then I think the point is moot. If Marinade can get to 60-80M SOL TVL in the next couple years via mSOL and Marinade Native then at that point reaching FDV would probably make sense to the market esp if the token allocation is fairly and widely distributed.
Growing the stake and building out governance should solve everything IMO.
Token holders govern the use of those tokens, so it wouldn’t make sense to vote with MNDE to use that MNDE in a way that damages the value of MNDE (i.e. incentives are aligned). Burning just reduces optionality.
marinade has a burned mint key, in lew of this the dao treasury holding a bunch of mnde is as good a 2nd choice as there could be. FDV is a bad meme for evaluating value of coins anyway, you should consider fully diluted supply after all outstanding allocation distributed, which i think for mnde is 400~500m tokens but depends on tvl milestones.
I see burning as rearranging deck chairs on the Titanic. It’s only ever used when all other ideas are exhausted and people are looking for one last pump to exit.
This is a market that is terrible, projects going broke all over the place. It’s also a market starved of funding. You burn your funding resource… well that signals (to me) you’re exiting at some stage soon.
But leaving tokens unused, in this market, is also death. And much worse in a sense as it is doing essentially nothing.
So in that sense I can see how burning tokens is marginally better as it is at least you doing something. I think simply dumping them out into the market as liquidity incentives is better but not much better.
There’s got to be better mechanisms to get them out and working that aren’t so simplistic.
It’s not as if we have to find a use for all of them immediately. The point of having them is that we will likely find a good use for them in the future. Leaving tokens unused is not death; it maintains optionality.
In a general sense, of course i agree, but at this moment it’s a dangerous time to be waiting.
Projects are failing all across defi and crypto.
And with them we lose more users and more transactions. That weakens everyone else.
We have to drive more transactions on chain. Without that staking is pointless.
I like the up coming MNDE incentives abs think they’re a good idea but they’ll do little to address the underlying issue which is: no one really uses defi for anything but speculation/gambling.
I don’t think that is an issue Marinade or any singular DeFi protocol is poised to solve. And burning MNDE certainly won’t solve it.
Gotta think the reason we keep losing in defi is no one is focused on the right things…