Marinade Finance: the latest liquid staking protocol on the Solana blockchain

Marinade (MNDE) has emerged as a new addition to the decentralized finance (DeFi) space, functioning as a robust liquid staking protocol on the Solana blockchain. Recognized for its innovative methodology, Marinade allows users to stake SOL tokens, earning compounding rewards while actively contributing to the decentralization of the Solana ecosystem.

In this guide, we’ll take a close look at the intricacies of Marinade, its distinctive features as a cryptocurrency, and its role within the broader DeFi ecosystem.

What is Marinade (MNDE)?

Marinade Finance is a liquid staking protocol operating on the Solana blockchain. It empowers users to stake their Solana tokens using automated strategies. This results in the acquisition of “staked SOL” crypto tokens, which can be seamlessly used within DeFi or easily swapped back to the original SOL tokens by unstaking.

MNDE represents the native governance token of the Marinade Finance ecosystem, serving as a fundamental element in shaping the protocol’s trajectory. MNDE tokens allow holders to participate in the decentralized decision-making processes governing the Marinade protocol and its treasury.

Holders of MNDE tokens have voting power, enabling them to influence key aspects such as platform upgrades, parameter changes, and strategic directions. This democratic governance structure aligns with Marinade’s commitment to community involvement, fostering a decentralized ecosystem where users have a direct say in the platform’s growth. The protocol also implements a non-custodial approach, making sure users maintain control and ownership of their assets throughout the staking process.

How does Marinade work?

Marinade allows users to tailor their staking experience by providing two options: native staking and liquid staking for mSOL, a liquid staking token. Both alternatives involve staking SOL tokens with a shared set of high-performance validators.

Liquid staking, enabled by a smart contract, grants stakers “marinated SOL” or mSOL tokens. These tokens unlock multiple possibilities as they can be used as collateral within the Solana DeFi ecosystem.

In the context of liquid staking SOL for mSOL, the value of mSOL increases incrementally relative to SOL each epoch. This growth is fueled by Solana’s inflation rewards, which are systematically added to the underlying staked SOL within Marinade’s stake pool.

Conversely, opting for Marinade native staking eliminates interaction with the liquid staking smart contract, bypassing the acquisition of mSOL. Instead, SOL staking rewards are compounded into the stake account at the end of each epoch.

Withdrawal of staked SOL is a straightforward process, achievable by unstaking and meeting the unlock period, which typically spans 1-2 epochs. Alternatively, in the case of liquid staking, users can accelerate the withdrawal process immediately for a nominal fee.

Notably, users don't have to unstake their SOL to transition into Marinade. The Marinade decentralized application (DApp) empowers users to quickly redelegate their SOL stakes to the validator pool. This allows for instant participation in Marinade’s native or liquid stake and the subsequent accrual of rewards.

Meanwhile, the platform acknowledges the importance of liquidity, enabling direct exchanges between mSOL and SOL on secondary markets at prevailing market rates. This feature enhances users’ flexibility, allowing them to seamlessly navigate between assets based on their preferences and market conditions.

According to Marinade’s white paper, Marinade extends its capabilities by allowing users to tokenize their existing stake. If users are currently delegating to a single validator and possess one or multiple stake accounts, Marinade allows these accounts to be converted into mSOL. This transformation supports liquidity, as it allows users to liquidate their staked assets and further engage with the broader DeFi ecosystem on Solana.

Native token: MNDE

Marinade’s MNDE token stands as a key enabler of governance within the protocol. It allows holders to actively shape the direction of the Marinade DAO (mDAO). This influence extends to crucial aspects such as managing fees, overseeing the treasury, and determining the allocation of the pool’s SOL stake among validators. The MNDE governance token, with a total supply of 1,000,000,000 MNDE, plays a central role in Marinade Finance’s decentralized decision-making processes.

Minted on November 7, 2021, MNDE was launched as a fair-launch token without an initial coin offering (ICO). Marinade introduced on-chain DAO governance in April 2022, marking a significant step toward empowering MNDE holders to participate in critical decisions related to the protocol’s treasury.

Participation in DAO governance with MNDE involves locking the tokens on Marinade’s Realms governance platform. Locked MNDE undergoes a 30-day unlocking period upon initiation, during which holders can't cast votes. However, those with locked MNDE can submit proposals on-chain and execute them when passed. Alongside its governance utility, MNDE may also play a role in incentivizing and rewarding active community participants.

At the time of writing, the current real-time MNDE price is $0.30, with a market cap of $75.30 million, according to OKX. The circulating supply is currently recorded at 255.38 million MNDE tokens.

MNDE’s token supply and distribution

Marinade’s MNDE token allocation is strategically divided for a dynamic ecosystem. 7.5%, or 75 million MNDE, is dedicated to initial contributors, a distribution set to conclude by January 2024. This group played a pivotal role in the project’s early growth.

The remainder of MNDE stays in the DAO-controlled treasury, empowering the DAO to propose and vote on token distribution. This flexibility allows the community to shape the timing and manner of MNDE token releases actively.

Additionally, 130 million MNDEs are currently locked within the DAO’s governance structure, employing a TVL-based unlocking mechanism. This approach makes sure that token releases align with the protocol’s growth, emphasizing decentralized decision-making and the value locked within the Marinade ecosystem.

Who created MNDE?

Lucio Tato co-founded Marinade Finance in 2021 after the project was awarded an $80,000 grant from a Solana hackathon. Tato is an accomplished Argentinian programmer specializing in proof-of-stake chains like Solana and NEAR. Tato is also the co-founder of Meta Pool, a multichain liquid staking solution.

The final word

Marinade represents an inventive platform that brings a fresh perspective to the DeFi landscape. With its user-centric approach, transparent governance, and robust functionality, Marinade offers a compelling solution for those seeking to participate in the Solana ecosystem. As users navigate the complexities of DeFi on Solana, Marinade Finance stands as a compelling choice to many, offering both innovation and accessibility within its ecosystem.

Visit the Marinade website or join the Marinade community for more information on the Marinade stake pool, faqs, and more.