Ackee Blockchain Kudelski
Ackee Blockchain Kudelski
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Last updated: Aug 16, 2023
Marinade Finance is a decentralized application on the Solana network that provides a non-custodial way for liquid staking for the blockchain’s native SOL token without the need to lock up funds. Staking with the Marinade Finance protocol results in receiving a derivative asset called ‘marinated SOL’ or mSOL that, in turn, may be used for various purposes across the Solana ecosystem.
Marinade Finance first caught the eye at the Solana x Serum Hackathon in March 2021 where it took third place. The creation of the protocol was fully backed by grants from the Solana Foundation and Serum and the project went live on August 2, 2021.
Marinade Finance is meant to be fully decentralized and governed by its community. For that, the team held no token sales and attracted zero investment from VCs leaving the whole supply of its native MNDE token in the hands of the Marinade DAO members.
Marinade Finance is a permissionless and non-custodial protocol that automatically lets users delegate their SOL tokens to some of the Solana blockchain validators. The validators are chosen by a transparent algorithm that takes into account their activity and efficiency. A more detailed explanation of the delegation process can be found here.
There’s a dashboard page that can be useful to users to keep them updated with stats regarding the Solana network and Marinade Finance protocol in particular.
All MNDE holders may participate in the project’s governance system. For that, they need to lock their MNDE tokens for a 30 days period in exchange for Marinade Chef NFT that works as a pass for voting. The amount of MNDE locked reflects the NFT level and the voting power of its holder. In the future, these NFTs are planned to become tradable on secondary markets. These NFTs are available for trade on MagicEden and a few other secondary markets.
The Marinade Finance app lets users stake their SOL using automated staking strategies. The received derivative token mSOL may be used on a wide range of DeFi protocols across the Solana network. The rewards for staking are being accrued in the underlying SOL position, therefore the value of mSOL goes up each epoch relative to SOL. For example, at a projected APY of 5,78%, 1 mSOL token will be valued as 1.05510 SOL.
Users may unstake their positions instantly with a small fee or wait for one or two epochs to do it for free. The Marinade Finance fees on users’ rewards are set to 2% and the team points this out as the lowest on the market.
For DeFi enthusiasts, Marinade Finance offers its liquidity mining program. Users may deposit their mSOL tokens into a single-asset pool to earn Marinade’s native MNDE token. MNDE rewards are also paid to liquidity providers of the SOL-mSOL pool. There are also other DeFi cases for mSOL incentivized by MNDE rewards listed on Tribeca governance page. All the gauges mentioned are installed and controlled by the Marinade DAO community.
Marinade Finance wallet options include most of the Solana-native wallets, the protocol has integrated solutions such as Phantom, Solflare, Exodus, BitKeep, Slope, MathWallet, Coin98, Sollet, and Glow.
MNDE is the native token on the Marinade Finance protocol. Its total supply is capped at 1 billion. A small portion of the circulating supply was distributed among early Marinade supporters while all the rest was dedicated exclusively as rewards for liquidity providers. MNDE holders may lock their tokens in exchange for Marinade Chef NFT which gives them the power to vote and make proposals in the protocol’s governance system.
On the other hand, mSOL is a derivative token reflecting each user's position in the Marinade Finance staking pool. Its supply is controlled by a mint-and-burn mechanism on the Marinade protocol. mSOL reflects each user’s staking position of SOL tokens delegated to Solana validators selected by the protocol’s algorithms. For providing the price for the mSOL token, the protocol relies on various oracles such as Chainlink, Pyth, and Switchboard.
Considering the team behind the Marinade Finance protocol operates anonymously, the project was backed by the Solana Foundation and Serum thus receiving support from the blockchain creators themselves.
In autumn 2021 the project went through three consecutive audits performed by Neodyme AG, Ackee Blockchain and Kudelski Security teams.
Marinade Finance has an active bug bounty program promising up to $250,000 in rewards.
Aside from the Solana Foundation and Serum who backed the founding of Marinade Finance from the start, the protocol is now deeply integrated into the blockchain’s ecosystem having listed many Solana-native dApps and a wide list of validators among its partners. Most notable partnerships via the Marinade Token Exchange program include protocols such as Raydium, Solend, Friktion Labs, Crema Finance, and Port Finance.
According to Marinade’s roadmap, the project still has a long road ahead. Most of the notable plans include adding more use cases for MNDE as well as Marinade Chef NFTs, integrating more wallets, and exploring new ways to enhance the decentralization of the protocol and the Solana network.
The Marinade Finance team runs a blog called Kitchen stories with regular updates on the protocol’s progress.
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