Tokenomics Review and Recommendation: Introduction of Token Locking and Treasury Funding for MINA

Hey all,

Between feedback here and Minacon last week, we would like to propose the following next steps.

Much of the feedback at Minacon echoed the feedback here on MinaResearch; In particular, that locking staked tokens for tokenomics purposes would be a big change for Mina, since it’s not required by Ouroboros, so should be carefully considered. Additionally, given that not having locking may itself have advantages, there has to be a pretty strong argument that it is beneficial.

Additionally, that many people were looking for a report that was aligned with the requirements in the RFP as the first deliverable, and that it is hard to productively engage with a proposal on a high level focused at just locking and a treasury without first reviewing the analysis performed on mina tokenomics in general. From the people I’ve talked to, most are looking for a draft report that has something more substantial to engage with. And particularly, for it to have an analysis of Mina’s current tokenomics, how it compares to other chains, and from that, recommendations on changes to the tokenomics.

That report can have locking as one of the recommended mechanisms, but if it does it should include a really solid analysis of the tradeoffs of having / not having locking, given not having locking may currently be a benefit. To make that case, it should include both quantitative and empirical arguments of impacts. Beyond that, people are looking for the report to include discussion on other possible mechanisms too so that the community can consider the set of possible changes and their potential benefits, risks, and tradeoffs.

To share also, there was sentiment from some of the folks at Minacon that this RFP was potentially originally raised with such high priority due to supercharged rewards remaining on; and now that they have been turned off, there may be less immediate urgency. Additionally, there seemed to be openness to a decentralized treasury at some point, but potentially decoupled from this tokenomics discussion, and perhaps once there is a tested ready mechanism that the community believes in.

It seemed regardless, there was interest in moving ahead with a comprehensive review of tokenomics and possible mechanisms, with priority of implementation contingent on what those mechanisms were and the further discussion on them.

Given all of this, we are recommending the following next steps:

  1. Consider the current proposal stopped / paused for now. This thread will remain open, but please know that for now there will not be next steps on this specific proposal.
  2. We are discussing with Economics Design developing a detailed report on Mina’s current tokenomics matching the requirements in the RFP as a next step, including possible benefits and risks of token locking and other mechanisms. This report will be shared in a new thread for further discussion and collaboration.
  3. After that new report has been available for a few weeks and discussions and any changes to the report have taken place, we will follow up with further polling and surveying to see if there is interest in moving forward with any of the proposed mechanisms as MIPs.
  4. Regardless of the outcomes there, we will follow up with a survey on discord to gather broader perspectives on tokenomics priorities.

Thanks everyone for your feedback so far! Please let us know anything else, and we look forward to next steps, and a draft report to collectively evaluate.

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