This is Ben Chow from Meteora/Jupiter! We’d like to work with the community on a proposal that can be a potential driver of mSOL TVL growth.
What do you propose?
We'd like to propose that Marinade add a gauge to our mSOL-SOL dynamic pool and work with us on a commitment of MNDE incentives to bootstrap liquidity to this pool.
In exchange, we will add to our UI for the mSOL-SOL dynamic pool that single-sided SOL deposits will stake SOL for mSOL to provide a balanced deposit into the pool.
We believe that this will create an effective mechanism that strongly correlates LM incentives directly to new mSOL growth such that more incentives would equal more mSOL growth.
Why Meteora dynamic pools?
Growing liquidity in Meteora’s dynamic pools has additional benefits as our dynamic pools deploy unused capital in the pool to our dynamic yield layer which aggregates lending sources in Solana to earn yield making our dynamic pools more capital efficient.
It is more sustainable to grow and maintain TVL in our dynamic pools as yield is earned both from swap fees and lending sources, allowing TVL to be maintained even after MNDE rewards stop.
We intend to open an mSOL dynamic vault so that mSOL liquidity in our dynamic pool will not be idle and instead be deployed to lending protocols which may spur more borrowing activity on mSOL and improve the borrow/lending utility of mSOL.
Considerations
The current liquidity crunch in Solana has caused many lending protocols to remain paused and so lending yield is currently low. We expect lending yields to improve as the ecosystem rallies to address this situation. Additionally, Meteora continues to aggregate new lending yield sources including tapping into the NFT lending space.
Next Steps
If the community is supportive of this proposal, we'd like to work together to come up with an initial commitment of MNDE rewards to support the development commitment on our end and also a plan to increase rewards if certain new mSOL growth milestones are reached.
Hi Ben, sounds like a great proposal to bring more mSOL usage.
Does Meteora have any plans for a mSOL-USDC dynamic pool? Would the use of the dynamic vaults offset some of the IL concerns?
I could see a scenario where additional MNDE rewards could be set aside as this is a pair that’s not heavily incentivized for users anywhere in SOL defi at the moment.
Keep up the good work!
The plan is only to support staking thru Marinade to facilitate automatically balanced deposits so that MNDE incentives better correlate to new mSOL growth.
That said if a user wants to go to jup, swap half their SOL to mSOL, and then manually add the SOL & mSOL deposits to Meteora they can.
This is really a convenience feature for automatically converting a singled-sided SOL deposit into a balanced deposit in one step.
We don’t have any plans for an mSOL-USDC dynamic pool at the moment, but, if everyone is more interested in building up TVL in this pool we’re happy to discuss this possibility.
While the extra yield from the dynamic vaults would help with IL they wouldn’t mitigate IL and this would still be something LPs would have to manage for themselves.
Jup will route users through Marinade if nothing else give a more favourable rate so by not using jup, it feel like this is staking for the sake of… whatever?
While as a Marinade staked validator more SOL staked to Marinade is strictly beneficial to me, I unfortunately have to express my concern towards this proposal for not acting in the best interest of your target audience.
Hello Ben, it’s an interesting proposal, and thanks for opening the discussion.
On my side, I’m a bit split as I’m not sure if more mSOL/SOL incentives are the best move for Marinade DAO, but on the other hand, the presence of the vault would make it an interesting product for mSOL users.
A question that I have is, would the MNDE incentives be claimable, or would they be reinvested in the position automatically? On my side, I would much rather the MNDE be claimable to not create additional sell pressure on the token.
Regarding the next steps nonetheless, this new gauge would have to follow the same principle as all other gauges, so it would be added as a new option in the Liquidity Mining gauges, and MNDE holders would be free to direct more MNDE to it over time or not by voting for it.
If you’d want plain MNDE to bootstrap the liquidity, this would fall into the “Grant request” bucket in my eyes and would require more than just allowing single-side deposits.
awesome to see such a feature to be potentially correlated with Marinade Finance. applying unused capital is the GOAT function to mark up the efficiency of SOL staking pools
From what I’ve seen it appears that they aren’t staking the idle SOL inside the LP. If they plan to do so I will probably start reminding everyone what happened in November.
This is a topic we’ve debated internally as well and so I’m glad you brought this point up so we can all discuss it.
Tbh, we’d prefer to route through Jupiter so the user gets the best rate, but, would the Marinade community commit to providing MNDE incentives to the mSOL-SOL pool if we did that instead?
The goal of this proposal is to create alignment where we can all win. The user gets an attractive APY for their SOL/mSOL holdings, Meteora can attract useful liquidity for mSOL/SOL that also benefits the ecosystem by being deployed to lending protocols, and Marinade can accelerate new mSOL growth.
Lastly, it’s not our intention to require users to stake thru Marinade. This automatic balanced deposit feature is an optional convenience. Users will always be able to go to Jup to swap SOL to mSOL and deposit in Meteora like they can today.
Thanks @defivan, I think Marinade has done a great job getting mSOL adopted by a large number of protocols, so I think it’s a great token for a dynamic vault. Hope to see more folks get behind this proposal so we can make this a reality.
I believe that you aren’t going to stake the idle SOL in the pool (and I think that’s the right thing to do) but someone had a different interpretation. If it turns out my interpretation is wrong then I will have to bring the November mSOL/SOL depeg up.
I believe that the interests of your users should be the top priority. If it’s not possible to ensure that while having Marinade to commit to MNDE rewards, then maybe this proposal could use some tweaking. With that said, I don’t think it’s a bad thing to set up a gauge for the pool if your protocol isn’t charging outsized fees and is protecting the interest of your users, given that you mentioned your users can claim their mined MNDE.
i would add on that routing via marinade instead of swapping for best price is just transferring gains from msol holders to delayed unstake arbers. Additional it does less to defend the msol/sol peg which is what LM is supposed to incentivize anyway.
as for grant vs gauge, I dont think this work make sense for a grant unless it came in the form of a treasury swap (presumably for meteora)
I think this proposal makes sense for both Meteora and Marinade.
Stimulating mSOL use in DeFi, and not be conservative with approaches of doing so, is in my opinion important in the current Solana DeFi environment.
Routing via Marinade instead of the best price approach is the way I see it worse for mSOL use. Stimulating mSOL use across the DeFi board is better than gateing that to Marinade.
Isn’t this exactly why Opendoor program exists? Where protocols create value, increase mSOL adoption, and then get MNDE which can be used as the protocol wishes such as in liquidity mining.
An alternative to consider is classic liquidity gauges. Protocols bought MNDE and locked it so that they would receive MNDE emissions. If Meteora (Mercurial) decided to not participate then, why don’t they just buy MNDE now and lock it? What’s changed since then so that grants for liquidity mining are now considered?
It seems illogical to even consider this proposal, because then why would other protocols participate in Opendoor or Liquidity guages when they can just ask Marinade for free MNDE before they’ve created value? This feels like the potential for another Lifinity-type outcome if it goes ahead.
While I think you point out things to consider fairly, I do not entirely agree. In the Solana DeFi environment rn I think it is more important to collaborate and help each other succeed, instead of trying to get people play a “curve wars” style of a setup with the gauges in a immature market with too few market participants. With TVL less than $250M on Solana it does not make sense to me that mDAO would position themselves like this imo.