What is the point of liquidity gauges?

just a jam session about liquidity gauges.

what do liquidity gauges mean to you? Who should participate? What standards should mDAO enforce on participants? If you were designing from scratch how should they work?

I think there has been a lot of contention stemming from disagreements about the purpose of liquidity gauges and it would be a good idea if mDAO could get directional alignment so in the future we have common ground for making decisions.


mDAO liquidity gauges mock Curve’s model, but without lockup and emission. It allows mSOL usage in numerous DeFi protocols, but should think if it is profitable for MNDE holders.

$3M/y is emitted via gauge, but does it really benefit MNDE holders over $3M/y? I agree that it brings better competition over stSOL, which does wLDO LM, but cannot really see other great usage.

On the other hand, if gauges stop, stSOL would take major stake over mSOL as users look for higher yields. To solve this, fees generated from mSOL should be distributed to staked MNDE. I cannot find other ways to solve this.

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One other difference to note is that curve incentivizes pools on curve (so some degree of homogeneity) where as marinade gauges incentivize 3rd party protocols.

It sounds like overall you are suggesting that you think gauges should somehow be profitable for MNDE holders? or is that a general comment about MNDE?

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It should be profitable for either of them. The current model is simply used for competing with Lido. I cannot find other reasons for LM gauge to exist.

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When bribing is implemented it will be profitable for MNDE lockers with an upper bound of the value of the MNDE emissions (no one should bribe with more than they receive in emissions).

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I’d generally be careful with comparing MNDE gauges to CRV gauges. As I said in the other thread, Curve plays a much more important role for the players who are supposed to play in the curve wars than Marinade does.
For a protocol that needs liquidity on their stable pairs, having high yield on Curve is much much much more important than it is for a Dex or whatever to offer high yield on mSOL deposits. Especially with Lido and other liquid staking protocols around/coming on. Marinade can simply not afford to make MNDE wars as tough for the participants as Curve can. It’s a very different dynamic and negotiation power.


yeh i agree can’t really compare to curve just a very different model

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Yes, I agree. To be straightforward, Marinade gauges are not really efficient. As @Durden said, bribe implementation would be better.

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Adding other effects of gauges:

A good one: 1) Decentralization of decisions. Incentive placement decisions are now decentralized.

A not so good one:
2) Incentives and governance are the same token. This is not so good, because people tend to vote themselves larger and larger parts of emissions. This is a self-reinforcing feedback loop. Those are the bad kind of feedback loops that can destabilize systems until collapse.

Crazy brainstorming idea: Should governance and incentives be different tokens? e.g. a new token for governance, MDAO for example, where you can vote on liquidity-gauges rates, and vote on proposals… but liquidity-gauges distribute MNDE, that you can use to vote on validator gauges (so MNDE still has utility, value, and functions as incentive, but it is not directly connected to the gauges that distribute it)

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personally Im not a fan of multiple governance tokens, I think they make participating more difficult/confusing for the average person. but i think there is perhaps there is something, like you can only vote on liquidity gauges or validator gauges to achieve similar?

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