Taking inspiration from other protocols (Indigo), I’d like to propose MIN Staking for ADA (MINAS - in Portuguese means digging site for valuable assets).
Currently, MIN as a token is rewarded to Liquidity Providers that Yield Farm their LP Tokens. As MIN emissions are being rewarded, currently, there is no incentive to keep them, so they are destined to be sold for other tokens, such as ADA or something else. Moreover, zapping MIN to the MIN/ADA LP pool also sells HALF of the MIN for ADA. This ends up putting massive selling pressure on the value of MIN. This proposal aims to give a second life to the MIN token.
I propose Minswap create a MIN Staking Pool: deposit MIN to the pool, and a % of transactions’ fees are rewarded as ADA in proportion to your MIN holdings. Adding more MIN to the pool would withdraw accumulated ADA rewards. Think of it as a holdback (as in “buyback”) program, where staked MIN is out of the circulation supply.
This would change the view of MIN from a Disposable Asset (sorry!!!) to an Appreciating Asset. LP providers that Yield Farm would no longer be encouraged to sell rewarded MIN but instead add to the staking pool, thus using MIN as a hedge against Impermanent Loss since having MIN would reward them with ADA. This would encourage more liquidity providers, yield farmers and TVL on the DEX.
This would ensure the rewarded MIN would have a purpose and inherent utility: hold MIN, stake MIN, and the DEX will reward MIN stakers with transaction fees %. Reducing the selling pressure is critical to shift the depreciating value of MIN.
A back of napkin calculation (say MIN is sharing 100000 ADA/day of the total transaction fees): 0.01% pool share = 10 ADA / day
I say the same thing, we need MIN staking, and urgently. I say that 30% of the release of the MIN token goes to MIN.
So that this is not a disposable asset, the implementation of 0.05% of all transactions will be destined to ADA/MIN but that is very little, annual MIN inflation is approximately 44%. I don’t like that and it worries me. MIN has all the potential to be better than CAKE, but it’s a matter of the developers wanting it that way.
I proposed that this staking pool empowers those who farm depending on the amount of MIN it has, just like CAKE does.
It consists that if you have 10 USD in farming and your APY is 10%, and you block 100 USD in MIN your APY goes up to 20% MAXIMUM. that APY is practically the same amount of MIN distributed in the pool, but! You take more profit as a reward than others for staking.
The benefit over CAKE would be that you would not have the need to block MIN for a certain time, and another thing I do not like that MINT that they invented, they should discard that idea, it is only market capital that leaks from MIN.
We find that staking in the context of revenue generating DEX tokens has the following problems:
The staking doesn’t have any real purpose. The term staking originates from Proof-of-Stake networks where owners that stake their coins participate in functions necessary to the continued operation of the network, such as the validation of blocks. This is the case for instance for the staking of $ADA on Cardano. However, in the case of DEX tokens where one can stake to get more of the DEX token, the staking does not have any necessary function in the protocol. While by using Liquidity Mining programs, DEXs are essentially buying growth and TVL, by offering staking tokens, they do not benefit in any way, they are plainly paying holders for not selling their tokens in the short term, which is not an efficient or sustainable use of capital long term.
The idea that fees collected from swappers are used to buy the DEX token on the open market to increase the buying pressure and then given to stakers, is usually counterproductive. Because this means that for stakers, there’s no way to take profits from staking the DEX token except to just sell it. So, what happens is that once people start selling the DEX tokens obtained from staking for profits, sell pressure actually overtakes the buy pressure created by the buybacks
Therefore, we should ask: what does the staking of a revenue generating DEX token look like where the staking plays a necessary function in the protocol, and where people do not have to sell the DEX token obtained to take profits?
