Summary
This proposal recommends transitioning MTRG emissions to the optimal emission curve ratified under MIP-10 and discontinuing the on-chain MTRG auction mechanism.
Specifically, it proposes:
- Disabling the MTRG on-chain auction mechanism
- Implementing the optimal emission curve with a gradually decreasing emission rate
These changes aim to improve emission efficiency, decouple MTRG and MTR price dynamics and its impact on staking rewards, and strengthen the long-term token economics.
Motivation
While the MTRG auction mechanism was initially designed to enable market-driven emissions, current market conditions reveal its limitations:
- The reserve price of 0.5 MTR/MTRG inhibits emissions when MTRG trades below that level, resulting in reduced staking yield for validators and delegators.
- User bids have largely replaced auto-bids due to persistent undervaluation in auctions, further reducing auction effectiveness and limiting MTRG availability.
- Staking yields are becoming inconsistent and less predictable, potentially deterring validator participation and undermining decentralization.
Moving to the emission curve approved in MIP-10 and disabling on-chain MTRG auction ensures a predictable, transparent supply schedule and decouples MTRG issuance from auction-dependent MTR demand.
More details on the on-chain auction mechanism can be found here - https://docs.meter.io/overview-of-meter/on-chain-auctions
Specification
1. Disable the MTRG on-auction mechanism
- MTRG emissions via the on-chain auction will be suspended.
- MTRG will be emitted algorithmically every 24 epochs based on staking weight.
- MTR demand will be limited to transaction fees and other protocol use cases.
- Auction-related staking functions (user-bid, auto-bid) will be disabled.
- MTR and MTRG pricing will no longer be algorithmically linked.
- The auction mechanism can be reactivated via a future governance vote.
2. Implement MIP-10 Emission Curve
- Initiate emissions based on the schedule outlined in MIP-10, which reduces inflation over time and enforces a hard cap on supply.
- This provides a balance between validator rewards and long-term token value preservation.
Read more about MIP-10 here - https://forum.meter.io/t/mip-10-optimal-token-emission-curve-for-mtrg-token/27
Rationale
- Validator Incentives: Predictable rewards strengthen validator confidence and simplify staking decisions.
- Economic Efficiency: Reduces inflationary pressure and eliminates inefficient auction pricing mechanisms.
Implementation
- Transition to algorithmic emissions based on staking weights.
- Disable the on-chain MTRG auction mechanism.
Voting Options
Yes – Approve the proposed emission curve transition, disable the auction, and decouple MTR/MTRG pricing.
No – Maintain the current auction-based mechanism and reserve price model.