With the Maple protocol launch quickly approaching, we're excited to share more details on the network's governance token. MPL enables holders to share in fee revenues, participate in protocol governance, and stake insurance to Liquidity Pools.
Maple is a decentralized corporate credit market. Maple offers borrowers transparent and efficient financing done entirely on-chain. For liquidity providers, Maple offers a sustainable yield source through professionally managed lending pools. The Pool Delegates that manage these pools perform diligence and set terms with Borrowers.
MPL is the Maple Finance ERC-20 native token. It serves three roles: governance, staking, and a share in network fees.
As the Maple protocol moves towards full decentralization, MPL holders will be responsible for governance. MPL holders can submit and vote on proposed changes to the protocol, including adjusting fees, minting or burning MPL Tokens, and other protocol level changes. If MPL holders don't want to participate in governance themselves, they'll have the option to delegate their voting rights.
MPL holders can also vote on distributing fees that have accrued to the Treasury. While this amount will be negligible at launch, it will grow as protocol usage grows. For reference, Curve's treasury is already dispersing millions of dollars of grants to its community.
Staking Liquidity Pools
MPL holders can provide default insurance to a Liquidity Pool - thus earning a share of the Ongoing Fees - by staking their MPL tokens. MPL holders will stake a combination of MPL and stablecoins into a Balancer Pool, and then stake that Balancer Pool Token (BPT) on a specific Liquidity Pool. In order to align incentives, Pool Delegates are required to stake on any pools they manage.
It's important to note that staking carries some risk - in the event of a collateral shortfall, the protocol will liquidate staked tokens in order to cover the difference between the value of the collateral and the Loan balance.
Each Liquidity Pool on Maple will have customisable Ongoing Fee parameters set by the Pool Delegate. These include, 1) what percentage of the interest yield is charged as the Ongoing Fee, and 2) how much of this Ongoing Fee goes to the Pool Delegate and how much goes to MPL holders staking that specific Liquidity Pool.
MPL holders earn a portion of the fees that Borrowers and Liquidity Providers pay to the Maple protocol. All Maple Token Holders earn a share of the Establishment Fee which is accrued to the Maple Treasury and distributed periodically. This fee is paid by Borrowers when their loans are funded and is shared between Pool Delegates and Maple Token Holders.
MPL holders do not need to stake their MPL in order to earn their share of the Establishment Fee. If MPL holders want to earn additional fees via participation in the Ongoing Fee paid by LPs, they can stake their tokens (see above).
You can view the MPL Scenario Calculator here.
We've been humbled by the excitement from our community around launch and want to make sure that the Maple community is able to participate in the network. There will be two ways to acquire MPL tokens at launch.
First, liquidity providers will be able to earn MPL rewards by providing liquidity to the network. Second, we'll be seeding a Balancer Liquidity Bootstrapping Pool with MPL tokens. Balancer LBP's have gained popularity as a fair mechanism for launching a token. LBP pools are designed to avoid front running- they generally start at a high initial price and fall over time as participants are incentivized to wait until the price falls.
We'll be releasing more details closer to launch.
Join the Maple Community
We'll be sharing more information on the Maple protocol as we get closer to launch. If you're interested in learning more and getting involved with Maple, join our Discord community and follow us on Twitter.