MobiusDAO: A primer on staking the $MOBI governance token
Staking goes live end of day October 3 on Mobius Money
Two weeks ago MobiusDAO launched its governance token, MOBI. With its launch, we successfully incentivized our liquidity pools, offering liquidity providers over triple digits returns on their stablecoin assets. In the coming week, we will introduce veMOBI, a voting escrow token that is locked up by users to earn boosted rewards and vote on proposals. In preparation for this monumental launch for Mobius Money, we will break down the rather unique tokenomics analogous to Curve Finance.
veMOBI
Formally, we define veMOBI as a voting escrow token that token holders receive in return for staking their MOBI tokens over a fixed period. There are three main benefits that a veMOBI token holders would gain by locking up their tokens.
- Potential to earn trading fees
- Governance voting power
- More veMOBI tokens!
The first benefit to staking is earning directly from the trading fees. Right now trading fees are set at 0.1% per swap. To put that in perspective, on $1B in volume, that would aquaint to $1M in generated fees.
As noted by the footnote, the percentage of the trading fees set to go to veMOBI holders has not been proposed, voted on, or implemented at the time of this article. While governance has yet to vote on a fee switch, in practice this would reduce trading fee revenue from LPs and stream instead to veMOBI holders. If this were to be turned on nonetheless, a veMOBI holder earns directly from the protocol’s success as a true stakeholder.
Down the road, we can imagine a portion of the LP fees could go directly to token holders, and towards MOBI token buy-backs on the open market.
Voting Power
One of the more immediate privileges gained by veMOBI is voting power. Anyone wanting to participate in the direction of Mobius can do so and is encouraged. To ensure commitment to the protocol, and avoid governance attack vectors, only veMOBI holder are allowed to do so. Just like in any other case, a user’s voting power is then determined proportionally to their veMOBI holdings.
Lastly, veMOBI tokens allow anyone to instantly boost their rewards depending on the locking period. Meaning that the longer a token holder locks up their MOBI, the more veMOBI they receive.
Boost Mechanism
Your earning weight is dependent on the minimum value between the liquidity provided and the total of the locked veMOBI. To calculate the maximum voting power, use this formula.
Essentially, the voting power is ¼ of the veMOBI held over a 1 year locking period. Meaning that if a token holder owns 100 veMOBI locked for 4 years, they only have 25 veMOBI in tangible voting power, that increases by 25 veMOBI per year. So that by year 4, 100 veMOBI will translate to the full 100 veMOBI worth of voting power after 4 years of locking it up.
The locking period is chosen by the user and can be set anywhere between 1 week and 4 years. For added transparency, instead of setting the time period, a user will instead enter a date that their veMOBI will be locked until. Please note, after a user’s MOBI token is locked, there is no ability to withdraw afterwards until the locking period has concluded. This means that locking MOBI is completely final!
Staking Process
veMOBI is similar to veCRV in that it acts as a voting escrow token that token holders receive in return for staking their MOBI tokens over a fixed period. This is done by design to encourage participation in governance. Unlike MOBI, veMOBI earns token holders 3x the rewards from the inflation schedule and if the community sees fit, could potentially earn from trading fees.
Locking period: 1 week to 4 years
Inflation and the Gauge system
In an effort to decentralize the weighting of the pool rewards and incentivize users for providing liquidity, Mobius has adopted a gauge system. Traditionally inflation goes directly to LPs which is then measured by a gauge. For veMOBI holders, the additional rewards they receive are calculated by the amount of liquidity the user is providing in the pool gauge relative to the total amount of liquidity provided and their veMOBI voting power.
As an added benefit, holders of veMOBI can also vote on the rewards allocation to the pools of their choice.
While a user should expect their vote to be finalized, there is a 10 day window for a user to change their vote when determining the pool weights.
Taken from the initial MOBI announcement article, the MOBI MATRIX showcases the privileges of each type of token holder.
MOBI Matrix
Outlined below is a matrix diagram showing the benefits of different LP + veMOBI staking positions.
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