The Mendi Loyalty Program
Mendi Finance’s tokenomics prioritize fairness through revenue sharing to support protocol and community growth.
Mendi Finance announces the launch of a Loyalty Program to create an accounting system that can be used to distribute future rewards that Mendi may receive by being in the Linea ecosystem.
The Linea Voyage XP measures the participation not just for the users, but also the protocols. Observing this we anticipate that in the future decentralization of the Linea governance, protocols will be airdropped tokens, similar to what happened in Arbitrum.
In case of this potential airdrop we will use MLP as an accounting system to distribute to fairly distribute the airdrop to holders.
To reward early contributors in the fairest way we are introducing the Mendi Loyalty Points (MLP). These are going to be soulbound ERC-20 tokens that will be distributed proportionally to the users of the lending protocol and the staking protocol.
You can earn MLP by staking $MENDI or borrowing assets from the Mendi Lending Pools. MLP is distributed to users when a milestone is reached, which we tied directly to the total borrows in the protocol
MLP is distributed:
- Proportionally to $MENDI stakers
- Proportionally to borrowers
- The more you stake or borrow the more MLP you can get
We capped the total future rewards to be distributed at 50%
- The remaining half of the future rewards will be kept in the protocol’s treasury.
- The governance, which is the decision-making body within the protocol, will have the authority to decide how to best use these funds for the benefit of the protocol and its community. They can allocate these funds to various purposes or investments as they see fit.
How the protocol achieves a milestone?
- Each milestone needs to be stay above threshold for 1 week in total for it to be considered achieved.
- We are using DeFiLlama to measure the total borrows of the protocol on a given day.
How are rewards distributed proportionally?
We are taking using on-chain data to calculate the time-weighted pro-rata for each address borrow and staking balance between each milestone. The first milestone is calculated from the announcement of the Mendi Loyalty Program. We will be adding the block number for each milestone below
- Start of the Mendi Loyalty Program — Block 606447
- First milestone — $8 million total borrows — Block 1502715
Using the on-chain data, we fairly calculate fairly each address’ share of MLP tokens
- The more you borrow the more MLP you can expect in return — The relative borrowing power of 1$ never decreases in any of the milestones. You will always get the same amount or more for rewards, rewarding long-term participation
- The more Mendi you stake, the more MLP you can expect in return.
- Balances are always calculated for the timeframe between milestone
- Exception is the first period, which started Oct-10–2023 11:59:56 PM +UTC (last block before midnight UTC time)
- The rewards are then going to be available to the users in the claim page. — Users can claim them any time
- There will be a leaderboard set up, where you can see your current progress — 2000 MLP is equal to 0.1% of the total anticipated Linea rewards.
Here you can see the unlock schedule, both in a table and on a chart:
The choice to use soulbound ERC-20 tokens was to ensure that these are not traded on the secondary market, as their is no value attributed to them at the moment. The Mendi Loyalty Points will enable us to track the community’s contribution to the protocol and distribute rewards in the future in a fair way.
We designed the system in a way that aligns the interest of participants. Each participant has a shared interest to reach higher milestones, to be able to claim more rewards. As the protocol grows ones ability to earn the same amount of rewards is not inflated. The potential reward share of the MLP token is also equal at every stage, and the upside potential of it grows exponentially the more MLP is unlocked. This can be seen by studying previous examples, where users can see how value was created to generate more rewards for early adopters.
