For those who are new, the community has been working on this proposal in our discord for the past several weeks.
To recap, the initial goals for the Meteora DAO and for this stimulus proposal are:
- Drive liquidity on Meteora and grow Solana’s TVL
- Build a strong base of MET stakeholders.
For more background on Meteora’s Stimulus Proposals:
- https://twitter.com/MeteoraAG/status/1730784233885474869
- https://meteoraag.medium.com/community-discussion-on-stimulus-proposals-12-6-706ac78ca12e
After much discussion with the community, we’ve come together on the following points for this proposal:
Reward Longtime LPs
We would like to reward longtime LPs of Meteora as they are the kind of long-term holders who believe in Meteora and its vision and have proven to be the kind of holders that will support Meteora through any tough time we may weather.
So, for LPs who have been supporting Meteora this entire time, we are thinking of rewarding longtime LPs with a points multiplier based on the following criteria: How early of an LP they were and their TVL contribution over time.
All liquidity will earn points. Active liquidity will earn on a multiplier based on fees
We would like to democratize LP incentives so that any liquidity can take advantage of these incentives. That said there are a few important topics the community has brought up. TVL that brings no volume is not useful and can be a way to game the system. Additionally, stable liquidity is much less riskier than volatile liquidity, which should be rewarded more to ensure that Meteora also grows useful volatile liquidity. With all this in mind, we would like to propose a base earning of 1 point per $1 of TVL per day, but with a points multiplier based on fees earned on liquidity.
Wallets/pools involved in wash trading and similar practices will have their points slashed.
Scoring
- 1 point per $1 of TVL per day
- 1000 points per $1 of fees earned per day
- 1.3x for LPs before Dec 1 for first 3 months
- 1.25x for everyone at points launch for the first month, 1.2x for 2nd, and 1.1x for 3rd month.
Rewarding Longterm Holders
With any incentive plan, it is important to identify your long term holders, so we are thinking of offering a way for people decide on receiving MET when we have our liquidity event versus having their MET locked in governance. Ppl who lock will earn a points multiplier.
Balancing incentive distribution between Large and Small LPs
Both large and small LPs bring value to Meteora. While large LPs contribute to TVL/volume, the majority of product improvements and new use cases come from working with small LPs. We are thinking of employing a tiered system for MET tokens in order to ensure a more balanced distribution of MET.
Distribution Schedule
We are thinking of a schedule of 1% per month of MET starting when we begin the incentive program. If the token is not liquid, LPs will accrue points representing the token amount. If MET has a liquidity event 2 months after the start, the points system will map to 2% of the token and from there on, LP incentives will switch to the token.
Preventing Sybil Attacks
Another important topic for the community was preventing sybil attacks. More discussion is needed in this area, but, a few ideas that the community felt was effective was Tensor’s off-chain function to allow users to link wallets in order to qualify for a higher tier and Bonk/Streamflow’s linking of social media accounts to wallets.
Rough Timeline
- Dec: work with the community on Stimulus Proposals
- Mid Jan: form MET DAO & vote on Stimulus Proposals
- Late Jan: incentives begin
- 2024: MET Liquidity Event
MET Liquidity Event The MET liquidity event will occur when Meteora reaches and sustains a certain TVL/Volume goal to be determined later.
Execution
The DAO will vote to allocate on the 10%, but, actual execution and distribution will be finalized by the DAO Council based on the guidelines in the proposal.
Discuss the Proposal
If you’re interested in helping to improve this proposal, join the discussion on discord, we’d love to have you.
