Open Doors is a 12-month program designed to incentivize mSOL liquid staking to increase liquidity in the Solana DeFi ecosystem
- Open Doors Could Add $1 Billion to Solana DeFi
- Major DEX Raydium has confirmed its attendance
- Marks the update to the MNDE tokenomic, which trades liquidity mining for rewards
Marinade Finance, Solana’s #1 post-Total Value Locked (TVL) protocol, has announced a major initiative to increase the deployment of SOL on the blockchain as the protocol aims to increase Solana’s decentralization and increase liquidity across the decentralized finance ecosystem (DeFi).
Marinade’s Open Doors program, which launches February 1, will distribute up to 16% of the protocol’s native MNDE token to Solana ecosystem partners who attract and hold deposits from mSOL: Marinade’s liquid staking token, the only liquid staking token on a blockchain available for trading on major cryptocurrency exchange Coinbase. Deposits of mSOL held in Solana logs between February 1, 2023 and January 31, 2024 are eligible for rewards of 4 MNDE per 1 mSOL according to the net growth in total TVL in mSOL.
Liquid staking deposits (LSDs) such as Marinade’s mSOL allow anyone to participate in securing PoS (Proof of Stake) networks without freezing their assets, democratizing access to network validation, increasing security throughout the chain strengthens. The deposit token given to Staker can then be used elsewhere for DeFi services such as yield farming, borrowing, and liquidity provision.
Currently, less than 3% of all SOL staked is liquid. Increasing this threshold will increase the TVL in the DeFi protocols on Solana, giving all users deeper liquidity to access. Marinade says that if 40 million locked SOL were converted to mSOL, it could provide Solana DeFi with nearly $1 billion in liquid TVL1. With a current TVL of $245 million, this could move Solana from 11th in the TVL to the top 5 of all blockchains.
Commenting on the launch of Open Doors, Alex Cerba, Principal at Marinade Finance, said: “Open Doors will distribute MNDE to individuals and protocols that will help build on Marinade and grow mSOL TVL. Converting the illiquid SOL currently being staked into mSOL would be a major boost to the DeFi TVL ecosystem and network decentralization. It is also an important next step in both the decentralization of Marinade DAO ownership and the MNDE tokenomics.”
Starting February 1st, Marinade’s Open Doors program is open to:
- Protocols supporting mSOL for DeFi and NFTs
- Validators using the liquid self-stake product
- Purses for self-custody
MNDE is remunerated to participants based on growth in mSOL TVL. A net TVL increase of 1M mSOL over baseline on February 1st will be rewarded with 4M MNDE over the year, spread across the partners who contributed. This will be incrementally increased until a maximum of 160 million MNDE is reached for a 40 million increase in mSOL TVL. Through this mechanism, Marinade will ensure that MNDE ownership only expands in line with protocol growth, bringing value to current MNDE holders.
Raydium Protocol, one of Solana’s largest decentralized exchanges, is already a confirmed participant in the Open Doors program. Stendhal, a spokesman for Raydium Partnerships, commented on Raydium’s decision to join: “We are thrilled to be part of the Marinade Open Doors program. This initiative gives us the flexibility to explore and incentivize new use cases for mSOL. We believe this program will help unleash a fresh batch of SOL liquidity to power the entire DeFi ecosystem while strengthening the network.”
mSOL is the most liquid and integrated LSD token on Solana and is supported by Tier 1 exchanges such as Coinbase, Kraken and Gate. It has undergone multiple audits to ensure its open-source smart contract, governed by a community multi-signature, is secure, allowing Solana users to deploy their SOL with confidence.
Marinade was established through grants in 2021, and as a fair launch token, MNDE had no VC allocation or initial coin offering. The Open Doors program provides an equitable way to distribute up to 160 million MNDEs to be made available over the next 12 months and is the latest campaign in a series of updates from Marinade to bring a new approach to MNDE tokenomics to introduce
The DAO recently voted to reduce liquidity mining by 75% to 250,000 MNDE tokens per week, and over three quarters of those tokens were voted by the DAO to be diverted back into the treasury. This equates to an overall reduction of almost 94% in MNDE supply for liquidity mining. Instead, the majority of MNDE will flow into direct contributions to the DAO and, most importantly, further adoption of mSOL in the ecosystem.
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