MIP-016 proposes to use 20% of protocol fee revenue from Q2 2025 to buyback $SYRUP tokens then distribute these as rewards to stakers of $SYRUP. This is a continuation of the monthly buybacks that were voted on and approved by the SYRUP community at the beginning of this year.
Detailed Proposal
In January 2025, MIP-013 was passed overwhelmingly, resulting in three months of buybacks throughout the quarter. A total of ~235,000 USDC of revenue was used to purchase ~1.96M $SYRUP tokens at an average price of 11.8 cents. 100% of these tokens were subsequently streamed to stakers.
This proposal continues with this allocation of 20% of protocol fee revenue to purchase $SYRUP on the open market in the same manner throughout Q2 2025. The purchased $SYRUP tokens will again be streamed via smart contract to holders of staked $SYRUP (stSYRUP).
Maple is now generating approximately ~$6m in ARR from fees on the loan book and other assets under management. TVL has grown rapidly, recently surpassing $1bn, while new products including BTC Yield are seeing tremendous growth.
Rationale
The advantages of a buyback mechanism remain the same as the initial proposal for Q1:
Reward Long-Term Stakers: By distributing repurchased tokens to $SYRUP stakers, the DAO continues to reward those committed to the long-term health and growth of the Maple ecosystem.
Increase Staking Incentive: The additional staking rewards will increase staking ratio and overall participation in the governance and decentralization of Maple.
Implementation
Should MIP-016 pass, buybacks will be implemented in the same manner as Q1:
Revenue Allocation: 20% of the protocol revenue over Q2 2025 will be allocated for token buybacks.
Monthly Purchases: The buyback will be performed following the end of each calendar month based on the revenue earned during the month.
Distribution to $SYRUP Stakers: All tokens bought back through this mechanism will be distributed proportionally to $SYRUP stakers, based on their staking amount at the time of each distribution.
Voting
MIP-016 can be voted upon by stSYRUP holders only, with the vote scheduled to go live on the 28th of April 2025.
By continuing to implement this buyback mechanism, Maple Finance aims to leverage its growing protocol revenue to directly benefit those most active in its governance, fostering a more robust and engaged community.
While the intent behind MIP-016 — to reward stakers and maintain engagement — is understandable, I believe that distributing bought-back $SYRUP to stakers is a misallocation of protocol revenue and could be detrimental to long-term value creation for the Maple ecosystem.
Rewarding stakers with tokens purchased via buybacks simply transfers $SYRUP sell pressure from the open market to stakers. Most recipients will sell their rewards for profit, negating the buyback’s price impact and undermining any deflationary effects. This does not create sustainable token demand or utility. This is also evident in most projects which use this mechanism, it tends to benefit whales and treasury/team mostly.
Protocol revenue is one of the most powerful levers a project has. Using 20% of it for staker payouts is not productively reinvested into growth. Alternatives would better align incentives:
Boosting loan yields (e.g. subsidizing lenders temporarily) would attract capital, deepen TVL, and grow usage.
Incentivizing borrower demand or liquidity provider retention would have direct protocol utility effects.
Token buy-and-burns would reduce supply, creating lasting deflationary pressure aligned with long-term holders’ interests.
If the Goal Is to Incentivize Token Ownership, Burn — Don’t Distribute
Buyback-and-burn mechanisms benefit all holders and make $SYRUP structurally more scarce. This directly ties protocol revenue to token appreciation, aligning long-term expectations of token price with protocol performance.
Staking on Maple currently is extractive, not additive. It currently functions as a passive reward mechanism that doesn’t contribute to protocol usage, stability, or growth (except for TVL figures). Until staking is tied to meaningful work — like underwriting loans, boosting liquidity, or increasing borrower retention — there is no strong rationale for rewarding stakers with revenue. Instead revenue should be used as mentioned previously to boost loan yields, incentivize borrowing or burn the token supply.
Happy to elaborate on any of these points, I might not have all the necessary information and am here for a constructive debate. I am a SYRUP holder and believe in this project long-term. But I strongly dislike incentivizing extractive mechanisms, the industry has tried this ad-nauseum and has mostly resulted in the destruction of capital which could have been used in better ways.
hey @Chubby thanks for the thoughtful response here and appreciate your support of the protocol!!
What we see on the data side is users who stake are NOT withdrawing and selling rewards. The amount of SYRUP staked continues to climb up, currently >500M staked. See the screenshot from Arkham of the SYRUP held in the stSYRUP contract over time. It’s clear from the data that 1) additional users continue to acquire SYRUP and stake it and 2) existing stakers are not reducing their staked positions.
As always, open to additional thoughts and we continue to monitor the data which drives our internal decisions.
Sure, for now its like this, but eventually people do take profit including stakers. Historically this has never been sustained by any protocol in the long-term.
My main point is to use mechanism which is future proof and is an efficient allocation of the protocols revenue by either incentivizing real adoption of the protocol (lending/borrowing token incentives) or all long-term token holders which understand that the token supply will decrease over time as the protocol buys back and burns.
Staking in its pure form is providing capital to do work securing the network, which incurs a risk and merits a reward (yield) to compensate for it. In the current format stakers do not secure the protocol or do anything productive with their tokens, they take no risk other than opportunity cost of holding SYRUP, so why should they get any yield for doing it? People will hold the token anyways even if there is no staking yield if they believe in the project and its future growth, so why spend money on something which will happen organically anyways?
With the regulatory progress in the US, protocols can now look to ensure that value creation accrues to token holders. Using protocol revenue for buy-and-burn achieves this, but think that buy-and-distribute can be more tailored in providing a explicit income stream for stakers, received in a tax efficient way (increasing stSYRUP : SYRUP ratio) that encourages holding rewards (as shown by @fatmac numbers) and staking (almost ~50% of SYRUP is currently staked).
Also, in a scenario of exponential protocol revenue growth, buy-and-burn can result in a higher price per token, that can limit investor participation (and require the equivalent of a stock split, as it has been already done in the MPL to SYRUP conversion).
Looking for a potential better use of that 20%, there was some discussion in the previous proposal on whether it made sense to start a buyback program before breakeven (see here), but current outlook does look like it is around the corner.
Tokens can be fractionalized, this is not a problem in crypto as it is in traditional markets, where indeed a buying a share for $2,000 would be prohibitive for retail investors.
I think its good to reward long-term holders, I just think that buy backs is a more effective way of doing that than token distributions.
For example:
You invest on Day 1, you buy 10,000 tokens, you own 0.00001% of the total supply, you like the project and the team, you are committed to holding for the long-term.
Day 1000: you still own 10,000 tokens and Maple has been doing super well and bought back and burned 25% of the token supply. You now own 0.000013% of the total token supply. You are rewarded for your long term commitment through increased ownership. The longer you hold your original position the more you are rewarded. This is also tax efficient since you are not creating a taxable event by just holding.
I can’t access the data in Arkham but it just looks to me like currently there are more people depositing their SYRUP to staking than withdrawing, so sure the net result is positive. But this trend can also easily revert.
The point is more in you can give a permanent benefit to all long term token holders with reducing available token supply with buy back and burn or give a temporary benefit to stakers who can cash out any time (be it short term 2 months farming or 10 years holding).
A 50/50 measure might be a good solutions tbh. 10% revenue to staking rewards and 10% buy back and burn.
Anyways I think I made my stance clear. Hope it adds to the proposal discussion.
I think that you raise a valid point and contribute to a discussion that should pick up exponentially among the Maple / Syrup community as the protocol makes progress to DAO governance.
Using the numbers in your example (below), holders would get the same ownership percentage increase in both models, only if staking is at (a theoretical) 100%. I think that buy-and-distribute has 2 main advantages:
Stakers get a higher increase in their ownership percentage (since staking is below 100%), so rewards are concentrated among engaged long term holders vs temporary holders (like liquidity pools or market makers that do not stake).
TradFi investors are used to the (more intuitive) economics of a stable supply vs a deflationary supply. Comparing APRs or getting accounting done looks easier with a non-deflationary buy-and-distribute model. It is the same as the fractionalized ownership issue, you can work out the math but investors prefer simplicity when it is available.
Buy and burn is good overall for syrup holders but there still needs to be an incentive for staking/long term holding. Also the staking contract absolutely needs syrup refilled unless we want more dilution in the future which would be a hard sell imo.
Revenue share for token holders is clearly the way forward, the question is just about how to distribute.
Maybe a combination of both? 50% burnt and 50% allocated to st-syrup?
