Marinade Finance, Solana’s No.1 protocol by total value locked (TVL), has announced a major drive “to increase staking of SOL on the blockchain as the protocol aims to increase Solana’s decentralization and grow liquidity throughout its decentralized finance (DeFi) ecosystem.”
Launching February 1, Marinade’s Open Doors program will “see up to 16% of the protocol’s native MNDE token distributed to Solana ecosystem partners that attract and hold deposits of mSOL” Marinade’s liquid staking token “that is the only liquid staking token on any blockchain available for trading on major cryptocurrency exchange Coinbase.”
Deposits of mSOL kept in Solana protocols between February 1, 2023 and January 31, 2024 will be “eligible for rewards of 4 MNDE per 1 mSOL in line with net growth in mSOL total TVL.”
Liquid staking deposits (LSDs) like Marinade’s mSOL “enable anyone to participate in securing proof of stake (PoS) networks without locking up their assets, democratizing access to network validation that strengthens the security of the entire chain.” The deposit token “awarded to stakers can then be used elsewhere for DeFi services such as yield farming, borrowing, and liquidity provision.”
At present, less than 3% of “all staked SOL is liquid.” Increasing this threshold will boost the TVL in DeFi protocols on Solana, “providing deeper liquidity for all users to access.”
Marinade says that, “were 40 million locked SOL converted into mSOL, this could make close to $1 billion in liquid TVL1 available to Solana DeFi. With its TVL currently at $245 million, this could move Solana from 11th in TVL to the top five among all blockchains.”
Alex Cerba, core contributor at Marinade Finance, says:
“Open Doors will distribute MNDE to individuals and protocols that contribute to building on Marinade and growing mSOL TVL. Converting the illiquid SOL currently staked to mSOL would be a major boost to ecosystem DeFi TVL and network decentralization. It is also an important next step in both decentralizing Marinade DAO ownership and MNDE tokenomics.”
Starting on February 1, Marinade’s Open Doors program will be open to:
- Protocols that support mSOL for DeFi and NFTs
- Validators using the liquid self-stake product
- Self-custody wallets
MNDE will be “rewarded to participants based on the level of growth in mSOL TVL.”
A net TVL “increase of 1 million mSOL compared to the baseline on February 1 will be rewarded with 4 million MNDE over the year, distributed throughout the partners that contributed to it.”
This will “increase incrementally until a maximum of 160 million MNDE for a 40 million increase in mSOL TVL is reached.” Through this mechanism, Marinade will “ensure that MNDE ownership expands only in line with protocol growth, bringing increased value to current MNDE holders.”
Raydium Protocol, one of Solana’s biggest decentralized exchanges, is already a confirmed participant in the Open Doors program. Commenting on Raydium’s decision to join, Stendhal, a Raydium partnerships spokesperson, says: “We are thrilled to participate in 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 unlock a new batch of SOL liquidity to power DeFi ecosystem-wide while strengthening the network.”
The most liquid and integrated LSD token on Solana, mSOL is “supported by tier-1 exchanges such as Coinbase, Kraken, and Gate.” It has been “subject to multiple audits to ensure that its open-source smart contract that is governed by a community multi-signature is secure, allowing Solana users to stake their SOL with confidence.”
Marinade was “founded by 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 of distributing up to 160 million MNDE that will be made available over the next 12 months and is the latest campaign in a string of updates by Marinade to bring a new approach to MNDE tokenomics.”
The DAO recently voted “to reduce liquidity mining by 75% to 250,000 MNDE tokens per week, and over three-quarters of these tokens have been voted by the DAO to be redirected back to the treasury.”
This represents “an overall reduction of nearly 94% of MNDE supply for liquidity mining.”
Instead, the majority of MNDE will “go towards direct contributions to the DAO and, most importantly, further mSOL adoption in the ecosystem.”