*obligatory not financial advice*
What is Marinade Finance?
Marinade is a dApp that allows users of the high speed Solana blockchain to stake their SOL coins, while keeping them liquid and still be able to also use them for other applications, which allows them to participate in the proof-of-stake consensus without missing out on using DeFi.
With Marinade, people can supply SOL to a pool that is automatically staking the funds across more than 450 different validators in exchange for the mSOL token that represents their share of the pool. This mSOL token can always be burned to revive the underlying staked SOL. All the staking rewards are directly added to the pool, so that the mSOL holders are earning compounded interest. Initially mSOL had the same value as SOL, but since the rewards are added to the pool it is backed by more and more SOL and gains value.
The main advantage of mSOL, aside of having the rewards automatically compounded, is that the token is fully liquid. You can deposit it in various other dApps like Solend or Port Finance, where you can earn an additional yield thru lending or you can use it as collateral to borrow some other asset. You can also swap it for SOL on a decentralized exchange, like Orca, which makes it possible to basically unstake your SOL without needing to wait for the unstake period of 2 days to be over.
The protocol has been audited and is one of the most used dApps on Solana and is maintained by a DAO that can select which validators to support. There are plenty of other applications that are working with mSOL which gives staked SOL much more utility. Marinade could be a great tool for anyone who is planning to hold SOL and use the Solana blockchain. The only downside is that Solana has a bit of infamy due to being quite centralized and having had multiple outages so far, which also puts Marinade Finance at risk.
The MNDE Token
Marinade has another token called MNDE, which is used for governance over the protocol. The holders can vote on which validators to support and on how the funds of the treasury are spent. To participate in governance, the holders need to lock their MNDE which will mint them a special "Marinade Chef"-NFT that represents their share. Holding this NFT allows you to vote on changes and it can be burned to redeem the locked tokens or can be sold directly but this also sells the underlying locked tokens. How high the voting power of such an NFT is depends on how much MNDE was staked to mint it.
The treasury is currently controlled by the developers, but will eventually be handed to the DAO. The treasury holds a large share of the MNDE supply and will also receive 2% of the staking rewards of the mSOL holders. The token holders will be able to decide how this funds are spent, they could for example be used to buy back MNDE to increase its value, but for now it’s used for things like grant programs or strategic partnerships.
There is a max supply of 1,000,000,000 MNDE. The mSOL holders can earn 35% of this supply thru liquidity mining on supported dApps like Solend and Port Finance. The treasury also received 35% and the developers got 30% which is being vested for 2 years. Currently the founders have a lot of control over the supply due to controlling the treasury and influencing the liquidity mining distribution, but their influence will eventually become smaller as more tokens get distributed.
Like always, the value of the token depends on how much liquidity is held in its smart contracts. That is because if more SOL is staked with Marinade, its DAO will influence more money. Since mSOL has a lot of advantages over regular staked SOL there could be a large demand for it if DeFi on Solana becomes more popular. However, Solana is very popular but also quite controversial due to being quite centralized and having had a few outages.
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