Marinade Finance Approves MNDE Buybacks Through Futarchy Voting

Marinade Finance, a top liquid staking protocol on Solana, has made a big move toward increasing the value of its native token MNDE.

The company, which is organized as a decentralized autonomous organization (DAO), recently approved a governance proposal — MIP.11 — that directs a sizable chunk of revenue flowing into its treasury to go toward buying back tokens.

Menelau stated that the use of treasury funds to buy back MNDE would help reduce its circulating supply.

What distinguishes this decision is the method by which it was made—not through a conventional DAO vote, but using a futarchy market run by MetaDAO. This method lets participants make predictions about proposals’ outcomes, and then those predictions are turned into economic incentives for voting—speculating on a proposal’s possible approval or rejection creates signals that help the ecosystem as a whole figure out what might be good or bad for it in the long run. When MIP.11 was passed using this method, it marked not only a financial pivot for Marinade but also a potentially significant moment in futarchy’s development as a Web3 governance mechanism.

Marinade receives its earnings from many places within the Solana ecosystem. These include, but are not limited to, the following: 1. Inflation from the native SOL token; 2. Miner Extractable Value (MEV); and 3. The protocol’s own Stake Auction Marketplace (SAM). Most of this revenue—about 90.5%—goes to stakers. Almost all (9.5%) of the remaining revenues flow directly into the DAO treasury.

MIP.11 proposed that 40% of this treasury revenue be dedicated to purchasing MNDE on the open market. Given Marinade’s annualized DAO revenue ranges between $7.2 million and $16.4 million, the buyback initiative could result in an annual acquisition of between $2.9 million and $6.6 million worth of MNDE.

This means that the conceivable impact relative to MNDE’s current market capitalization of $50 million is between 5.8% and 13.2%. We can’t stress enough that this is not just a smart way to allocate funds—that part is not negligible, mind you; it’s a decent investment strategy. But it’s more than that; it’s not a technical move. It’s aimed at increasing the long-term value of the tokens we hold, and it’s aimed at a path to better liquidity in MNDE-related markets.

The decision to greenlight MIP.11 happened through a futarchic process. In this, traders buy and sell conditional tokens that represent the value of MNDE if the proposal were to pass or fail. This is done to calculate with much better accuracy which outcome—in this case, the passing of MIP.11—might be more beneficial to the protocol.

MetaDAO hosted the futarchy market and presents the following as a final result: a 5.8% spread between the time-weighted average price (TWAP) of the Pass and Fail scenarios. The TWAP for the Fail condition was $0.0992, while the TWAP for the Pass condition was $0.105— higher than the spot price of MNDE, which was just $0.096. Notably, they refer in their conclusion to a market that is guessing fairly accurately.

The market had a volume of $33,000 and 50 trades—a good figure for a governance-specific prediction market. When the proposal was confirmed as passed, MNDE rallied hard, going up more than 50% and then stabilizing at a point that is roughly 16% above the Pass TWAP. This move highlights how confident the market is in the proposal and how powerful futarchy can be for making governance decisions that have a measurable financial impact.

MIP.11 is now in effect Marinade is positioning itself as one of the first DeFi projects to successfully implement futarchy in a high-stakes, revenue-based decision.

The approved MNDE buyback program sets a precedent not just for MNDE holders, but for the entire DAO-driven Web3 space.

The buybacks serve two purposes. They return value directly to tokenholders. When we buy back your tokens, it is your value that we are restoring. The value proposition becomes even more compelling because of the price floor potential. Steady demand could serve as a nice buffer against shambolic market sentiment. But the buyback makes sense in context—when steering governance tokens to the right nodes becomes paramount—because the shambolic governance problem could dampen demand.

Even though DAO governance is frequently characterized by low engagement or incentives that are not aligned, the way that Marinade Finance has opted to govern itself through the use of futarchy could serve as a model for other protocols when it comes to being both efficient and legitimate in their decision-making.

Marinade is becoming more than just a staking protocol; it has an appropriate treasury strategy and governance structure that delivers stakeholder value. In this configuration, it is a sustainable Web3 organization.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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