Mercurial: Mainnet Beta Recap and Planning Forward

Summarizing progress made and sharing next steps for liquidity growth, rewards, and tokenomics

Mercurial Finance is building the liquidity platform for stable assets on Solana. As the DeFi ecosystem on Solana grows, there will be many different variants of collateralized, wrapped, and synthetic assets in the space. Our most immediate objective is to provide the best liquidity for all the major stable and pegged assets on Solana, which we started with our Mainnet beta.

In this post, we will do a quick recap of progress leading up to Mainnet, our Mainnet Beta, and our approach to execution moving forward:

Progress In June

In the one-month post listing and leading up to the mainnet beta, we made progress on several key points across product, community, and team.

1. We completed two product versions (Devnet1 and Devnet 2). We have gotten a lot of quality and constructive feedback that helped us improve our product significantly. Just as significantly, we made a range of low-level technical optimizations. The community played a critical role in helping us ship a highly polished version for Mainnet.
2. Though still early, we have established a growing community on Discord and Twitter, who have been actively providing a full range of ideas and feedback on product and strategy. The community has strongly oriented around the notion of MERCs, and we have designed a series of NFTs and incentives centered around growing that identity.
3. We made several excellent additions to the team, including Pierre Arrowana, one of the OG developers in Solana, and Ben Chow, a very experienced serial entrepreneur with an exit to Disney/Playdom to drive community and growth. In addition, two core team members joined full-time in June. We believe we now have a solid team with the necessary expertise to deliver on the vision and execute on liquidity and community growth.

Mainnet Beta

We focused the mainnet beta on a 3pool in collaboration with Parrot, one of the top projects in Solana, whose investors include Alameda, Sino Capital, Mgnr, and many others.

We have two ongoing goals for the Mainnet Beta:

• Provide robust liquidity between the stable assets currently live on Solana (PAI, USDC. USDT)
• Growing the core group of supporters who participates, understand the objectives, and can help to drive education and awareness for the project

We have developed Solana’s first three token pool to concentrate liquidity in a single pool rather than across multiple pools for the same tokens. In this instance, instead of having liquidity across three different pools (PAI/USDT, PAI/USDC, USDC/USDT), all the liquidity can now be used to facilitate one single pool.

The only downside here is that risk is concentrated as well; if one of the assets is compromised, then the whole pool will also be vulnerable.

Collaborating with Parrot on PAI aligns with our stated objectives of providing robust liquidity for stables and helping the Solana ecosystem establish new foundational assets. We believe that the PAI stablecoin will add value to the Solana ecosystem by creating a native decentralized stablecoin. We will be working closely with Parrot to grow adoption, liquidity, and awareness for PAI.

Launch Recap

We hit our cap of 5million USD in a day with no rewards. Using our 3pool, we now offer the best rates for swaps for stables on Solana across USDC/USDT/PAI.

We now have a universally praised system for the elegant UX and bug-free transactions after all the improvements made to our product due to feedback from devnet one and devnet 2.

TVL, Rewards, and Tokenomics

After a series of consultations with the community, here’s the current thinking for TVL growth, LP rewards, and tokenomics.

1. Targeted Growth Of Capital

We currently have the likely best stable swaps on Solana from our current asset pool, so any expansion of assets needs to come with careful considerations. Having too large a TVL will lead to unrealistic expectations or emissions and unsustainable liquidity.

Furthermore, stable swaps are still small relative to trading unstable swaps, mainly because the DeFi market has not picked up yet. When it does, we will be there for it. In addition to the market, we also need time to build up our reputation for being THE place for stable liquidity.

As such, we will be carefully expanding the pool with key pools and assets that the ecosystem requires and growing locked capital in conjunction with providing the best liquidity in the space.

2. LP Reward Planning

We intend to give appropriate rewards to our early contributors of liquidity who helped us bootstrap the system. Keeping the TVL relatively small allows us to provide rewards without the stress of dumps. The full details will be provided after consultation with the community.

In addition, our strong preference for liquidity provision is not for farm and dump users but for users who want to be part of the process of building up Mercurial. So instead of advertising APY and trying to draw as much F&D capital as possible, our focus will be to build up a core group of supporters who understand and believe in MER.

3. Community Awareness And Education

The current token price and liquidity continue to be shaky but see limited upside in updating tokenomics at the present moment. Instead, we believe it would be far more advantageous to focus on providing a secure and robust base for executing moving forward in product, community, and team.

That said, we think there are many major improvements to make the MER token much better, and we are very excited to work on them with everyone. We are looking forward to working with everyone to evaluate the best strategy and approach for the MER token!

Mercurial, Together

As with the development of our mainnet, we want the community to be deeply involved in developing these features. We will share early previews of the features, discuss tokenomics and distribution ahead of time, and work together on a plan to grow education and awareness together.

We expect most of these key ideas and community plans to be rolled out over the next few months. We are incredibly excited about what is to come, both in terms of the growth of the overall Solana ecosystem and the Mercurial Platform.

One of our key focus in this phase is to engage our community. We have revamped our community portal to make it easier for our community members to claim their rewards and learn more about Mercurial. We will also be using the portal to share more about the Philosophy of “Day 1” and how one can join the Day 1 Mercs family to play a more significant role in Mercurial’s growth!

Most of all, though, we are excited about executing this project alongside the MER/MERC family. Forward!