MIP-008: Tokenomics updates

Proposal Forum
1

Summary

We invite registered Mapes to vote on three proposed changes to tokenomics for improved utility.

The three changes are simply;

  1. Introduction of xMPL, and the use of establishment fees to buy back MPL and transfer to xMPL holders
  2. Enabling tokenized assets to be deposited single-sided as Pool Cover
  3. Token distribution ratios for the new Solana token ‘SYRUP’

For registered Mapes, voting will begin on Discord at 10:30am ET on 03/01/22 and will end 10:30am ET on 03/08/22. To pass, the proposal requires responses from 20% of registered Mapes.

Discord channel chat: Discord
Discord channel for Mapes to vote from 10:30am ET on 03/01/22: Discord

Background
We launched the protocol with our governance token MPL, an ERC-20 native token. Maple is committed to growth in 2022, and aims to reach $5bn in Total Loan Volume by the end of the year by continuing to create products that serve customer needs and generating more value for the protocol and MPL holders. These changes generate more value by improving the utility of MPL by ensuring the token is central to the use of the Maple protocol.

To this point we have engaged community members in a Discourse discussion https://community.maple.finance/t/ongoing-discussion-mpl-tokenomics/116, and Discord chat https://discord.com/channels/576728229449170954/926071480884822016, spoken to partners and advisors and circulated the output in a long-form article: https://maplefinance.medium.com/5-changes-to-tokenomics-for-improved-mpl-utility-281b417ab3b1

Motivation
Our north star is to improve MPL token utility, at the same time as supporting the long-term growth of the Maple protocol. We are also motivated to share platform revenues with MPL holders, but that such participation must be active and incentivize long-term engagement from token holders.

For position
Maple should proceed with the 3 proposed changes to tokenomics for improved utility.

Against position
Maple should not proceed with the 3 proposed changes to tokenomics for improved utility.

In detail:

1. Introduce xMPL and use establishment fees to buy back MPL and transfer to xMPL holders

We propose that MPL holders will be able to commit their tokens to a smart contract and receive xMPL in return.

We also propose that the the Maple DAO Treasury will receive 0.66% in annualized establishment fees (up from a flat 0.25% per loan under Loans V1), and as set through governance propose to use ~50% of revenues to buy back MPL on the market and deposit to the xMPL pool.

As a result, after choosing to commit MPL to a smart contract to earn xMPL, holders of xMPL will compound their MPL balance through actively participating in the xMPL smart contract.

Benefits:

  • Increased establishment fee % to the DAO Treasury
  • Treasury buys back MPL monthly, returning value to xMPL holders

2. Enable tokenized assets to be deposited single-sided as Pool Cover

With the creation of xMPL, we propose that xMPL and other tokenized assets, can be deposited as Pool Cover as a single asset to Lending Pools on Maple.

Providing Pool Cover earns depositors 10% of the interest earned by a Pool unless otherwise determined by the respective Pool Delegate. Pool Cover provides a reserve to cover defaults in Lending Pools, and is liquidated when defaults occur.

Benefits:

  • Introducing single-sided cover means that holders of xMPL and other tokenized assets can deposit and receive a yield without incurring impermanent loss.
  • Single-sided cover increases the incentive for MPL to be deposited as cover, thus reducing the circulating supply.

3. Token distribution ratios for the new Solana token ‘SYRUP’.

With the launch of Maple onto Solana in Q1 2022, the two main token considerations are to deliver a safe and efficient deployment that minimizes dilution of MPL, and ensure benefits to existing MPL holders. Due to current risks of bridging technologies we will create a new token on Solana, and keep it private for approximately 6 months after launching on Solana mainnet.

The conceptual framework is that the Maple DAO Treasury will hold 40% of ‘SYRUP’ tokens, which it would then deposit to collect 40% of the establishment and ongoing fees. These would flow to the xMPL pool for buy backs so that those holding xMPL benefit directly.

Token distribution

  • Maple DAO Treasury on Ethereum: 40%. This is the largest allocation, to be held on behalf of all MPL holders on Ethereum. The Maple DAO will deposit ‘SYRUP’ tokens and collect 40% of the fees generated and pass these through to xMPL via a buy back of MPL.
  • The Maple Solana Treasury: 30%. This allocation can be used for liquidity mining, strategic token swaps with other protocols and OTC sales to strategic partners. Providing more flexibility for later funding or treasury diversification.
  • Core team, advisors and acquisition: 30%. This allocation can be used to cover acquisition costs, hiring additional world-class team members including Solana-specific developers and advisors, and aligning existing Maple team members.

Benefits

  • Existing MPL holders on Ethereum will benefit and be aligned to the long-term growth of Maple.
  • The Maple DAO will be the largest holder of ‘SYRUP’, with generated fees used to buyback MPL for xMPL holders.
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