Shaping Meteora DAO in DeFi 2.0

:comet: Meteora DAO Proposal :comet:

The Meteora DAO will be a decentralized community governing the protocol, aligning incentives to drive long-term liquidity and growth on the Solana ecosystem.

It embodies the principles of DeFi 2.0:

:small_blue_diamond: 1) Community Empowerment and Inclusivity:

1.1 - Implement a quadratic voting system, giving more voting power to smaller stakeholders, preventing whale dominance.

  1.1.1 - Retain the quadratic voting system as the base, giving more voting power to smaller stakeholders.

  1.1.2 - In addition, implement a staking 
  multiplier that boosts voting power based on 
  the duration tokens are staked/locked.

     For example:
     - Tokens staked for 1 month get 1.01x voting 
     power boost
     - Tokens staked for 3 months get 1.05x 
     voting power boost 
     - Tokens staked for 6 months get 1.1x voting 
    power boost
     - And so on, with higher multipliers for 
     longer staking periods

  1.1.3 - The staking multiplier serves two 
  purposes:

     a) It incentivizes long-term commitment and 
     alignment with the DAO's goals.

     b) It makes it more difficult and costlier for 
     whales to split tokens across multiple wallets 
     to gain outsized voting influence.

  1.1.4 - There could be a maximum multiplier 
  cap (e.g. 1.8x) to prevent any single entity 
  from accumulating excessive voting power 
  through staking alone.

  1.1.5 - Unstaking tokens resets the multiplier 
  until they are staked again for the required 
  duration.

  By combining quadratic voting with a staking 
  multiplier, the Meteora DAO can further its. 
  goal of balanced governance and discourage 
  whales from trying to gain disproportionate 
  control through token redistribution tactics.

  This promotes greater decentralization and
  empowers smaller stakeholders who 
  demonstrate long-term commitment to the
  ecosystem.

1.2 - Governance forum for open discussions,
proposal submissions, and regular community
calls for updates and feedback.

1.3 - Allocate 10% of DAO treasury for
community grants, funding initiatives proposed
and voted on by members.

:small_blue_diamond: 2) Token Vesting:

2.1 - Tokens earned through the DAO reward
system will be subject to linear vesting over a.
set period, such as one year.

2.2 - Tokens will be released in equal
installments at regular intervals (e.g.,daily or
monthly) over the vesting period.

2.3 - Contributors can stake their vested
tokens to earn staking rewards and obtain
voting power based on the staking multiplier.

:small_blue_diamond: 3) Time-Locked Unstaking Period:

3.1 - If a contributor wishes to unstake and
withdraw their tokens from the DAO, they
must initiate an unstaking request.

3.2 - Upon initiating the unstaking request, a
time-locked period of one month will begin.

3.3 - During this one-month time-locked period,
the contributor’s voting power associated with
the unstaked tokens will decrease linearly until
it reaches zero at the end of the month.

  For example, if the time-locked period is one 
  month, the voting power will decrease by 
  1/30th each day until it reaches zero after 30 
  days.

3.4 - After the one-month time-locked period
ends, the contributor can fully withdraw their
unstaked tokens from the DAO.

By reducing the time-locked unstaking period
to one month, we maintain the incentive for
long-term commitment while providing a bit
more flexibility for contributors who may need
to withdraw their tokens sooner.

The gradual decrease in voting power during
the one-month period still discourages
frequent unstaking and promotes sustained
participation in the DAO.

:small_blue_diamond: 4) Value Creation and Merit-based Rewards:

4.1 - “Proof-of-Value” system to quantify
contributions like liquidity provision,
development work, and community initiatives.

4.2 - Token rewards vested over 2 years,
incentivizing long-term commitment and
continued value creation.

4.3 - Explore partnerships with complementary
DeFi projects to create cross-ecosystem
incentives and reward opportunities.

:small_blue_diamond: 5) Decentralized Governance and Decision-making:

5.1 - Modular governance with separate
processes for tokenomics, protocol upgrades,
partnerships, etc.

5.2 - Clear proposal lifecycle: discussion > on-
chain voting (quorum 25%) > implementation.

5.3 - Implement decentralized identities (e.g.,
Soulbound Tokens) for secure and verifiable
voting processes.

:small_blue_diamond: 6) Collaborative Incentive Structures:

6.1 - Liquidity mining programs incentivizing
collaboration among LPs, e.g., shared rewards
for jointly providing liquidity.

6.2 - 25% of protocol fees distirbuted to active
Meteora DAO Stakers.

6.3 - 12.5 % of protocol fees distributed betwen
MET/SOL & MET/USDC LP providers.

6.4 - 12.5% of protocol fees distributed to
active participants (LPs, developers,
community) based on contributions.

6.5 - 10% for DAO Treasury.

6.6 - 25% of protofol fees distributed for
Meteora Core Team.

6.7 - 5% for Meteora MET/SOL & MET/USDC
forever locked LP.

6.8 - 10% for Meteora Treasury.

:small_blue_diamond: 7) Practical Utility and Real-world Applications:

7.1 - Prioritize partnerships with real-world
projects and enterprises, tokenizing traditional
assets on Solana.

7.2 - Develop user-friendly interfaces,
educational resources for onboarding
mainstream users to Solana DeFi.

:small_blue_diamond: 8) Continuous Innovation and Technological Advancements:

8.1 - Dedicated research and development
workstream focused on cutting-edge liquidity
solutions and scalability.

8.2- Incentivize and reward community
contributions to the DAO’s open-source
codebase through bug bounties, grants.


This proposal aims to create a truly decentralized, community-driven DAO based in DeFi 2.0 that empowers all stakeholders, incentivizes value creation, fosters collaboration, and drives sustainable growth for the Solana ecosystem.

3 Likes

Wow, that’s quite comprehensive! On the whole, this is very good. I like the idea of increasing voting power based on the amount of time staked. However, this isn’t going to give smaller stakeholders more voting power relative to whales. If a whale stakes for the same amount of time as a small stakeholder, both their voting power is going to increase at the same rate. It really does nothing for the smaller stakeholder. Regardless, it is an interesting concept and I like the idea.

I like the idea of incentivizing liquidity of the MET token. It means we will eat our own dogfood. Perhaps the 12.5% distribution to MET/SOL & MET/USDC LPs could be based on the fees LPs generate in those pools. It would be like a bonus for providing liquidity in those pools.

The other edge of that sword is that if users are providing MET liquidity, it means they’re not staking. It would be great if somehow we were able to come up with a solution to provide voting power to those providing MET liquidity, but that could be exceedingly difficult and could end up being gamed. I suppose it is just something we must accept as collateral damage of providing liquidity on MET.

Good stuff @auryanaum !

2 Likes