Summary
We propose allocating either 2.5%, 3.5%, or 3.5% of the total MGV token supply as incentives for participants of Mangrove Season 1 (MS1). This allocation honors previous Mangrove’s commitment to its community, where points earned during MS1 were intended to be converted into MGV tokens. On top of Gold reward of Blast, participants received MS1 points. This incentive aims also to re-boost previous users to return to the platform and stimulate new activity, thereby bootstrapping Mangrove’s trading volume and user engagement.
Background
During MS1, which included Polygon and Blast as part of the points calculations, Mangrove achieved significant activity:
- Traded Volume: $485 million
- Users: 8,100
- Trades: 240,000
During this period, Mangrove’s fee switch was enabled, generating approximately $100,000 in fees. However, following the conclusion of MS1, trading volume and user activity on the platform declined significantly. To address this and deliver on our commitments, we propose redistributing incentives to past participants while launching a new program to drive renewed engagement and activity on the platform.
Proposal Details
- Incentive Allocation: Allocate 2.5%, 3%, or 3.5% of the total MGV token supply to MS1 incentives. We will decide on the exact percentage through a vote.
- Distribution Mechanism:
- Immediate Distribution: 35% of the allocated tokens will be distributed immediately to MS1 participants, honoring the original commitment.
- Conditional Distribution: The remaining 65% will be distributed to those participants who engage in the upcoming Mangrove Season 2 (MS2) program, incentivizing ongoing activity.
This approach allows for the secure allocation of tokens to active community members. If a user does not return or fails to claim their tokens within one month, we recommend returning the tokens to the DAO. This ensures that the treasury remains intact and prevents token wastage. If the user does return later, they are incentivized to re-engage and become a stakeholder. This mechanism is inspired by the vesting strategy implemented by Blast.
Rationale
- Fulfilling Commitments: By allocating MGV tokens based on the points earned in MS1, we honor the promise made to participants, reinforcing trust and goodwill within the community.
- Reviving Activity: Redistributing incentives to previous users is expected to encourage them to return to the platform, thereby boosting trading volume and liquidity.
- User Retention: By linking the second half of the incentives to participation in MS2, we aim to promote long-term engagement and retention while discouraging extractive behavior, ensuring a more sustainable and active user base.
- Ecosystem Growth: Increased activity will attract new users and enable the flywheel to start at Mangrove, enhancing the overall ecosystem.
Decision Required
We need the community to decide on the percentage of the total MGV token supply to allocate for MS1 incentives:
- Option 1: Allocate 2.5% of the total MGV supply.
- Option 2: Allocate 3% of the total MGV supply.
- Option 3: Allocate 3.5% of the total MGV supply.
Next Steps
- Community Discussion: We encourage all community members to share their thoughts and preferences regarding this proposal.
- Voting: After the discussion period, a Snapshot vote will be opened for five days to choose one of the three allocation options.
Conclusion
By allocating MGV tokens based on the points earned during MS1, we honor our commitment to participants and incentivize them to re-engage with the platform as mentionned here: [MIP-#4] Ecosystem Budget until Mid September 2024
Tying future incentives to continued participation in MS2 aims to keep Mangrove’s platform activity and build momentum for upcoming initiatives.