Marinade Finance is a staking protocol operating on the Solana blockchain. The platform allows users to stake SOL tokens using an automated staking strategy developed by the Marinade core team, taking input from MNDE and mSOL holders. ^[1]

Co-founded by Lucio Tato, Marinade Finance launched in 2021.

Overview

Marinade Finance functions as a non-custodial staking protocol on the Solana blockchain. Users can stake SOL tokens through Marinade using an automated staking strategy crafted by the Marinade core team, influenced by MNDE and mSOL holders. Marinade users can stake natively or opt for liquid staking in the pool, featuring over 100 high-performing Solana validators. Native staking with Marinade involves no smart contract interaction, while liquid staking yields "marinated SOL" tokens (mSOL). ^[1]

Since July 2023, Marinade Native has allowed users to leverage the automated delegation strategy with their natively staked SOL, eliminating the need for smart contracts. ^[1]

Marinade Native

Introduced in July 2023, Marinade Native offers a staking solution on the Solana blockchain, incorporating an automated delegation strategy for stake management. This system aims to streamline stake monitoring and rebalancing while minimizing exposure to smart contract risks. Unlike liquid staking methods, Marinade Native leverages Solana's native functionalities, ensuring users control their SOL tokens and exclusive withdrawal rights. ^[2]

Diverging from liquid staking norms, Marinade Native lacks deposit or performance fees. Users can exit without fees by observing a cooldown period and for those seeking an instant exit, a small fee applies, contingent on available liquidity. Marinade Native users do not receive mSOL; instead, they establish Solana stake accounts in their wallets, with account management delegated to Marinade. As a native staking approach, rewards are directly distributed to each stake account at the end of each epoch, occurring every 2-3 days. ^[2]

Marinade Native also introduces an optimized delegation strategy, automating stake monitoring and rebalancing without associated costs. Users benefit from delegation to top-performing validators, eliminating the need for manual management. The platform ensures the durability of staking positions by dynamically delegating to various high-performing validators, adapting to changes in their performance over time. Additionally, Marinade Native considers revenues from multiple sources, including MEV, and identifies validators that maximize value redistribution to their stakers. ^[2]

In addressing potential risks, Marinade Native safeguards users against commission rugging, where validators alter their commission structures to the detriment of delegators' rewards. The platform protects against issues like chosen validators going offline or using outdated client versions. Looking ahead, as slashing risks may be introduced to Solana, the active monitoring and rebalancing of staked SOL within Marinade Native emerge as crucial measures to mitigate risks associated with underperforming or malicious validators. ^[2]

Marinade DAO

The Marinade DAO (mDAO) is formed by individuals who hold MNDE tokens and opt to lock them in governance. By locking MNDE tokens in Marinade's governance, these token holders gain voting power within the Marinade DAO and access to associated MNDE utilities. ^[3][4]

The Marinade DAO is dedicated to establishing a censorship-resistant layer for Solana, enhancing security, and improving capital efficiency through SOL liquid staking. While supporting censorship resistance and liveness initiatives, the DAO focuses on ecosystem development without venturing into second-layer DeFi primitives. ^[3][4]

Utilizing a transparent delegation strategy, the DAO prioritizes long-term performance and validator decentralization to uphold Solana's robust and censorship-resistant nature. The objective is to make the delegation strategy accessible, predictable, and subject to consensus within the ecosystem. ^[3][4]

To ensure flexibility, separation of powers allocates critical system components to Marinade governance, while operational control and funding are entrusted to the core team. Fees generated primarily fund team operations and protocol development, with surplus fees subject to governance by the DAO. ^[3][4]

MNDE token distribution adheres to DAO objectives, emphasizing a fair launch and widespread ownership in the ecosystem. Amendments to the constitution necessitate a two-thirds majority and at least 1% participation of all tokens. ^[3][4]

MNDE Token

MNDE is the native token of Marinade Finance. Holders of MNDE tokens have the opportunity to engage in the governance of the protocol. This involvement encompasses decision-making authority over the DAO's fees, treasury management, and selecting validators who will receive the SOL stake from the pool. ^[5]

Tokenomics

Initial contributors receive a 7.5% allocation of MNDE, amounting to 75 million tokens. The distribution to these contributors is expected to conclude by January 2024. The remaining MNDE treasury is governed by the DAO, which holds the authority to propose and vote on decisions regarding the distribution of tokens, determining the manner and timing of such allocations. ^[5]

mSOL Token

mSOL is a liquid staking token obtained through staking SOL on the Marinade protocol, representing the staked SOL within Marinade's stake pool. These tokens serve as records, enabling later conversion to the staked SOL and accrued rewards. Additionally, mSOL can be utilized in DeFi while its value fluctuates relative to the price of SOL. ^[6]

Operating as a rewards-accruing liquid staking token, mSOL undergoes value recalibration after each Solana epoch (2-3 days), dependent on the staking rewards earned by the Marinade Stake Pool. It's noteworthy that the protocol cannot create new mSOL without an equivalent amount of SOL being exchanged for them. Consequently, the total staked amount increases, leading to a rise in the price of mSOL each epoch relative to SOL, contingent upon the distribution of staking rewards for the SOL staked in the protocol. ^[6]

mSOL Directed Stake

Directed Stake is a Marinade product that enables mSOL holders to select a validator for support while taking advantage of mSOL's liquidity. This feature will oversee 20% of Marinade's stake pool. In each epoch, the mSOL allocated for directed staking to individual validators will be used to distribute the 20% stake. Consequently, the quantity of SOL delegated to a specific validator with one mSOL will vary based on the total mSOL utilized for directed staking and the proportion of Marinade's Total Value Locked (TVL) represented by the 20% stake. ^[7]

mTransactions

mTransaction is a publicly accessible RPC-like service that facilitates communication between transaction senders and validators with stakes on their nodes. It leverages the enhancements made to Solana in 2022 and 2023, specifically incorporating QUIC (Quick UDP Internet Connections) and Quality of Service (QoS) updates. ^[8]

Users engaging with the service can submit transactions to mTransaction, redirecting them to one of the participating validators. Subsequently, the selected validator utilizes its staked node to transmit the transaction to the network leader through a QUIC connection. ^[8]