MIP: Incentivizing TVL and Node Operations through Meter Foundation Node Delegation

Governance
1

This improvement aims to incorporate additional Meter Foundation Delegation to Validators (over and above Meter Ecosystem - Roadmap to 500 Nodes) based on their TVL contribution to the Meter Ecosystem

Background

At the heart of the improvement proposal is Meter Ecosystem’s ideology to further decentralize the Meter Network. However, as the Meter ecosystem continues to grow, the increased network activity needs to be supported with larger TVL in DEFI applications.

Meter Node Operators are the core community and the strongest supporters of the Meter Ecosystem. With this proposal, we aim to generate higher TVL on the network through our core community while providing adequate incentives to do so.

Goals

The core goals of this proposal are;

  1. Further decentralize the network with more validators
  2. Increase TVL on Meter Network

It is important to note that ‘Not all TVL is Equal’!

With the addition of TVL, the idea is to promote TVL which supports network activity better.

At this stage, the key TVL metrics for the ecosystem are;

  1. TVL on MTRG Pairs:

    1. MTRG Pairs currently represent the highest utility on the network. With both MTRG-BUSD and MTRG-WETH pairs having 200K USD TVL on Voltswap, we need to boost this TVL higher to enable higher activity on the network

  2. TVL on Blue-chip Pairs

    1. ETH, WBTC and BNB are key assets held by non-speculative capital and have the ability attract larger capital to the Meter Ecosystem
    2. Also, adding these Volatile pairs has the potential to generate higher arbitrage volume within the network and across networks

  3. TVL on Stablecoins (Money Markets > DEXes)

    1. As lowest risk assets, while stablecoin pairs add little value on DEXes, the value is significantly higher on lending and borrowing protocols

  4. Supporting PASS Holders

    1. With this proposal, we plan to support PASS holders who are node operators gain some returns
    2. PASS holders who start a node can earn returns on their capital locked up in PASS

MTRG Allocation

We propose additional Meter Foundation Delegation of 2 Million MTRG to Validators in addition to the Meter Ecosystem - Roadmap to 500 Nodes program.

Max MTRG Delegation:

Proposal Community Limit (Validators) Per Validator Delegation (MTRG) Max Delegation (MTRG)
Roadmap to 500 Nodes Founding Validators 100 50,000 5 Million
Roadmap to 500 Nodes Non-Founding Validators 400 22,500 9 Million
Current All Validators - - 2 Million

Proposal Specifics

  1. Priority 1: MTRG Pairs in DEX

    1. Delegation Factor = 150% of TVL

  2. Priority 2: Blue Chip Assets + Stablecoins + PASS Holders

    1. Delegation Factor = 100% of TVL

Note:

  1. The TVL goals mentioned above are combined to provide the same delegation factor across all assets (Blue Chip Assets, Stable coins, PASS Holders) to ensure simplicity of allocation.
  2. PASS Holders need to hold the tokens in the same address as the Node address

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The TVL has the potential to earn additional APY on the DeFI Platforms (DEXes, Lending and Borrowing etc.). Few examples of impact of delegation on Node APY are below;

Current Program

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Minimum APY Potential – Non founding Validator + 5000 USD in Priority 2 TVL (Non MTRG Pairs, Money Markets or PASS tokens)

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Maximum APY Potential – Founding Validator + 100,000 USD in both Priority 1 and Priority 2 TVL

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Calculator

Users can calculate the potential MTRG delegation for their node by using the Calculator provided here.

Form

We have created a google form to get information on the Node Addresses willing to participate in the program.

As the program is looking to determine the TVL on all DEFI platforms in the previous month, this form will help us drill down on specific accounts for which we will have to verify the TVL information. Without the form, it would be a herculean task to access TVL information of all accounts on Meter Network across all DEFI platforms.

The link to the form is below:

MIP: Incentivizing TVL and Node Operations through Meter Foundation Node Delegation

Important Notes

  1. The MTRG delegation to the node will be based on the TVL lower bound level mentioned in USD Terms for the particular bracket due to difficulty in delegation for arbitrary numbers.

  2. The MTRG delegation will lag the TVL provided in the previous month.

    1. For e.g.: MTRG delegation for the month of January 2023 will be done based on the average daily TVL by an account in December 2022
    2. This ensures that the MTRG delegation being provided is rightfully earned. Realtime delegation can be easily gamed by the users

  3. TVL should be provided for a minimum duration of 10 days (last 10 days) in the earlier month is required to be eligible for the delegation. TVL withdrawn within the first 20 days is not eligible for delegation

  4. In case the TVL provided has changed over the month, irrespective of the duration the TVL is provided, the average TVL will be determined based on 30 days. This is to ensure that users are not taking undue advantage of the program.

    1. For e.g. Adding higher TVL for last 10 days to increase the delegation

  5. The budget allocation of 2 Million MTRG delegation can be increased at discretion of Meter Foundation while ensuring that the overall staking ratio is not more than 50%

    1. This will ensure that the overall staking APY remains above 10%

  6. You only need to maintain the PASS tokens in the same address as the one operating the node. There is no additional requirement.

  7. PASS Tokens have to be help on the account through the previous month

TVL Verification Timeline

Due to the added activity to verify the TVL provided by the node addresses, we propose below timeline,

  1. Node Address to provide TVL in the previous month as specified under ‘Important notes’
  2. Node Candidate to fill out the google form before end of month -11:59:59 PM to avail MTRG Delegation in the next month
  3. Meter Foundation to verify TVL Information across DEFI platform by end of 4th - 11:59:59 PM and determine MTRG delegation
  4. Meter Fondation to provide Delegation for the Month from 5th of Ongoing Month to 5th of Next Month

Projects included in the Proposal

The TVL will be considered across all current and new DeFI applications on Meter Network.

Current dApps:

  1. Chee.Finance: https://app.chee.finance/
  2. Sumer: https://app.sumer.money/
  3. Voltswap: https://voltswap.finance/
  4. Jioswap.Finance: https://app.jioswap.finance/
1 Like
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This proposal is driven by our community member shanjiefengyi

3

I have read the proposal and I find it really very interesting. :clap:
Because surely now even users who do not have an active node (and are simply staking) can decide to open their own node and to receive, in addition to the 22500 MTRG that are due to the first 500 nodes, also other delegated MTRGs based on the TVL they contribute to the ecosystem (and in this way their APY would be much higher)

I would say really very interesting and I will definitely vote for it.
I hope everyone can read the proposal and really consider the possibility of creating a node thanks to which they would have a higher APY than simple staking

4

I really like this proposal. It encourages the creation of nodes and the increase of TVL in the Meter network. The fact that a utility is given to pass tokens is also very interesting. Excellent proposal!