Tokenomics 2.0: Contributors seek feedback on revamping MARS

Mars Protocol
3 min readJan 24, 2024

Moments ago, Mars Foundation contributors posted ideas on a radical overhaul of Mars’ tokenomics.

The proposal is divided into 2 parts:

  1. Short-term implementable initiatives (Section 1)
  2. Innovative, discussion-driven ideas for the future (Section 2).

Check out the complete proposal in the Mars Forum, or let’s dive into a high-level overview below!

‍Section 1: Immediate Actions

First, they propose burning ~319 million of the ~619 million MARS in the community pool. This would streamline the protocol’s assets as it will soon cease outflows for security/validator rewards with the move to DAODAO governance.

Next up, they recommend revamping of the fee system with fees allocated to the following:

  • Buying nobleUSDC for the Safety Fund
  • Buying and burning MARS
  • Buying MARS & a pair token (like OSMO or NTRN) for liquidity provisioning

This new fee distribution methodology achieves the following:

  • Buy/Burn streamlines fee distribution to holders, reducing MARS supply via deflation
  • Buy/LP builds in-house liquidity, potentially removing the need for external liquidity mining schemes
  • Maintains steady support to the Safety Fund, a cornerstone of the Mars ecosystem

‍Section 2: Long-Term Improvements

Here, they explore innovative, complex ideas that require more community input and discussion.

First up, stakers would receive a portion of the protocol fees, calculated weekly or monthly. An individual’s share would depend on the amount of MARS they have staked and the fees they’ve paid. This unique dynamic rewards the protocol’s biggest users the most.

Specifically, the rebate formula considers a user’s staked MARS, total protocol fees, and the user’s contribution to these fees. This encourages both staking and active protocol usage.

If a future governance proposal passes along these lines, unstaking MARS would involve a waiting period. This aims to add stability to the staking ecosystem, and would be a parameter adjustable via governance vote.

Finally, another exciting proposal is initiating a Mars Protocol referral program. If accepted, it would enable users to create referral codes, share them, and potentially earn from referred users’ fees.

The proposed system rewards more active referrers with greater benefits. Higher tiers mean increased rebates and discounts for users, incentivizing widespread participation and referral activity.

‍Your Opinion is Vital

Your insights are key to shaping this proposal. Engage in discussions, share your views, and help mold the future of Mars Protocol now by visiting the full forum post: https://forum.marsprotocol.io/t/mars-tokenomics-2-0/1199.

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Some or all features of mars v2 may not be legal to use in certain jurisdictions, including in the United States with respect to leveraged transactions. No person is solicited to use Mars v2 or receiving an offer to enter into any transaction, through this post or otherwise. Users are responsible for ensuring their own legal compliance and may be at risk of serious liabilities for violating their local laws or the laws applicable to other users interacting with them on a peer-to-peer basis through Mars v2. Remember, Cosmos, Neutron, Osmosis and Mars are experimental technologies. This post is subject to and limited by the Mars disclaimers, which you should review: https://docs.marsprotocol.io/docs/overview/legal/disclaimers-and-disclosures

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