1. Title: Strategic MIN Tokenomics Revitalization - Temp Check
2. Type of MIP: Non-Constitutional
3. Self-introduction of the Member:
AQube is a specialized firm in blockchain economic research, DeFi strategy, and tokenomics optimization. The firm applies a structured, research-based methodology to token restructuring, liquidity planning, and incentive system optimization. We are an active participant in the Algorand DeFi Committee and contribute to the new staking consensus, ensuring that our work is informed by cutting-edge governance and liquidity management practices.
Our experience includes:
- Managing $400M+ in TVL across DeFi protocols.
- Supporting $6M+ in fundraising for blockchain projects.
- Designing strategic liquidity and tokenomics models for multiple DeFi platforms, integrating cross-chain mechanics and optimal staking mechanisms.
- More information can be found at: aqube.io
Why AQube for Minswap?
Unlike an internal hire or community-driven effort, AQube provides an objective, independent, and data-driven approach. Our role is not only to conduct in-depth research but to design fully executable strategies with clear implementation frameworks. Our experience ensures that we will:
- Leverage proven models used in high-performing DEX ecosystems while tailoring them to Minswap’s unique structure.
- Execute beyond research, crafting governance proposals that are ready for DAO voting and implementation.
- Engage key stakeholders to ensure smooth integration and alignment with the broader DeFi landscape.
- Bring an unbiased perspective, free from internal biases that may arise from Minswap’s existing structure.
4. Scope of Change:
This proposal requests funding for AQube to conduct a comprehensive analysis of MIN’s current tokenomics and deliver a detailed report along with two targeted Minswap Improvement Proposals (MIPs) for DAO consideration. The proposed MIPs will aim to:
- Establish a Buyback & Burn System for the MIN token.
- Implement a General Token Burn for the MIN token.
The initiative’s goal is to introduce structured economic mechanisms to counteract current challenges and foster long-term value creation for MIN.
5. Motivation:
The MIN token, fundamental to the Minswap ecosystem, faces challenges that limit its growth and market perception. It is often viewed primarily as a farm token, with inflationary pressures contributing to sustained sell pressure and stagnant trading activity. Despite Minswap’s dominance as Cardano’s leading DEX, MIN faces critical challenges:
- Stagnant Market Perception: The token is perceived primarily as a yield farming asset rather than a strategic governance and value-accruing token.
- Inflationary Pressure: Yield farming rewards introduce sustained sell pressure, preventing sustainable price appreciation.
- Lack of Scarcity Mechanisms: With a significant portion of the total supply circulating, MIN is seen by some as having unchecked dilution potential.
- Underutilized Revenue Streams for Token Value: Currently, staking rewards distribute ADA, but there is no direct mechanism to return value to the MIN token itself via buy pressure or supply reduction.
This initiative is crucial to address these issues, enhance token utility, and improve MIN’s overall market standing.
6. Rationale:
This proposal aligns with the Minswap community’s mission to ensure the long-term health, growth, and sustainability of the Minswap ecosystem and its native MIN token. By implementing data-driven tokenomic improvements, we aim to:
- Enhance Token Value: Directly address inflationary pressures and increase scarcity, benefiting MIN holders.
- Improve Market Perception: Shift MIN from being viewed solely as a farm token to a valuable governance and utility asset.
- Strengthen Ecosystem Health: Create a more robust and sustainable economic model for Minswap’s core token.
- Drive Engagement: The process of researching, proposing, and implementing these changes will foster community discussion and participation in governance.
7. Key Terms:
- MIN: The governance and reward token of the Minswap DEX.
- DEX: Decentralized Exchange.
- Tokenomics: The economic model and characteristics of a cryptocurrency token, including its supply, distribution, and utility.
- Buyback & Burn System: A mechanism where a portion of platform revenue is used to repurchase tokens from the open market and then permanently remove them from circulation (burn).
- General Token Burn: A direct reduction of the token supply by burning a predetermined amount of tokens.
- Real Yield: Revenue generated by a protocol from its core operations (e.g., trading fees) distributed to token holders or used for mechanisms like buybacks.
- KPIs: Key Performance Indicators; metrics used to measure the success and impact of implemented strategies.
- POL: Protocol-Owned Liquidity; liquidity that is owned and controlled by the DAO/protocol itself.
- CEX: Centralized Exchange.
8. Specifications:
AQube will deliver the following:
I. General Report:
A detailed analysis of MIN’s tokenomics, performance, and liquidity status, serving as the foundation for the proposals. It will include:
- Background & Comparative Analysis: A deep dive into MIN’s market performance (vs. UNI, SUSHI, CAKE), highlighting the need for stronger liquidity strategies and token burn mechanisms.
- Liquidity & Market Depth Analysis: Assessment of MIN’s current liquidity concentration (MIN/ADA on Minswap DEX) and limited CEX liquidity.
This section will also evaluate the potential of reallocating a portion of DAO treasury POL to CEXs and collaborating with a professional market maker to enhance liquidity, price discovery, and generate DAO revenue through arbitrage.
II. DAO Proposal 1: Buyback & Burn System
A formal MIP draft ready for DAO submission, aiming to establish a Buyback & Burn System.
- Mechanism Design: Proposal to allocate a percentage of real yield (from transaction fees, treasury staking rewards) to buy back MIN from CEXs/DEXs. The exact percentage to be determined based on research.
- Comparative Research & Impact: Highlighting successes of similar systems (PancakeSwap, SushiSwap) and projecting MIN’s potential deflationary impact.
Expected Outcomes: Reduced circulating supply, increased scarcity, improved market perception, and better long-term value.
III. DAO Proposal 2: General Token Burn
A formal MIP draft ready for DAO submission, for a General Token Burn.
- Rationale & Data-Backed Justification: Addressing MIN’s inflation rate (~9.5% over the past year) with data from comparable DEXs.
- Burn Mechanism Design: Proposal for a specific burn schedule, targeting unused tokens (e.g., from liquidity mining rewards or undisturbed DAO treasury supply), with a transparent execution process.
Expected Outcomes: Deflationary effect, reduced supply, enhanced long-term value.
Goal: 10–20% reduction in circulating supply within the first year of execution post-MIP approval.
KPIs for Monitoring Success of AQube’s Resulting Proposals (once/if implemented by DAO):
- Reduction in Circulating Supply.
- Increase in Buy Pressure (trading volume, price changes).
- Liquidity Improvement on CEXs (bid-ask spread, active market makers).
- Stakeholder Engagement (community feedback, governance participation).
9. Steps to Implement (for AQube’s engagement covered by this funding MIP):
Step 1: Initial Research & Analysis
- Conduct deep-dive market performance analysis of MIN.
- Comparative study of DEX tokens (UNI, SUSHI, CAKE).
- Analyze MIN liquidity, market depth, and inflation.
- Begin drafting the General Report.
- Resource Allocation: AQube research team.
- Cost: $2,000 (first part of fixed fee).
Step 2: Finalize Report & Draft Governance Proposals
- Complete and refine the General Report incorporating feedback if any interim sharing occurs.
- Design the Buyback & Burn System mechanism and draft the corresponding MIP.
- Design the General Token Burn mechanism and draft the corresponding MIP.
- Prepare all deliverables for the Minswap DAO.
- Resource Allocation: AQube research and strategy team.
- Cost: $2,000 (second part of fixed fee).
Step 3: Submission of DAO Proposal 1 (Buyback & Burn) to Minswap Governance
- AQube will provide the fully drafted MIP for a Minswap DAO member to propose through the official governance process. AQube will support the proposer with clarifications during the discussion phases.
- Cost (Success-Based): $4,000 payable to AQube if this MIP is successfully passed and implemented by the Minswap DAO.
Step 4: Submission of DAO Proposal 2 (General Token Burn) to Minswap Governance
- AQube will provide the fully drafted MIP for a Minswap DAO member to propose through the official governance process. AQube will support the proposer with clarifications during the discussion phases.
- Cost (Success-Based): $4,000 payable to AQube if this MIP is successfully passed and implemented by the Minswap DAO.
10. Timeline:
- Months 1–2: Research, General Report creation, and drafting of the two MIPs by AQube.
- Post-Month 2: The drafted MIPs will be ready for submission to the Minswap DAO governance process by a community member. The timeline for DAO voting and implementation of those subsequent MIPs will follow the standard Minswap DAO Governance Procedures.
11. Overall Cost (to engage AQube as per this MIP):
The funding request for AQube’s services is structured as follows:
- Fixed Fee: $2,000 per month for two months, totaling $4,000. This covers the comprehensive research, analysis, the General Report, and the drafting of two complete MIPs.
- Success-Based Incentives: $4,000 payable to AQube for each of their drafted governance proposals (Buyback & Burn System, General Token Burn) that is subsequently passed by the Minswap DAO and officially implemented. This amounts to a potential additional $0 to $8,000.
Total Potential Cost: Minimum $4,000, Maximum $12,000.
Voting Options:
- Yes, Pass this proposal
- No, Do not pass this proposal
