MIP7 Update: Protocol access requires $MLN
It’s been a while since Tom Shaugnessy, Ceteris Paribus and Chris Manessis published MIP 7 with the Enzyme community. This proposal made a powerful case for moving towards MLN tokens being used to access the protocol based on how much AUM usage a user is consuming. After being discussed at length, MIP7 has been embraced by the Enzyme Council and the community.
As part of Sulu, the amount of MLN you need to provide for access will be calculated at 25bps.
What does MIP7 mean for you?
- User of Enzyme (Vault Manager or Investor)
- Developer building on Enzyme
In order for people to value MLN as an incentive, its value has to be clearly linked to a utility that stakeholders can easily understand and help drive. In our case, the utility is AUM usage.
The User of Enzyme.
Building secure DeFi applications in a quick and timely manner is hard. Maintaining them and keeping them secure is even harder. In order to procure the best talent, we have to pay competitive market prices and higher quality audits.
In short, paying a modest access fee helps to keep the development team and ecosystem running smoothly and ensures that the best people in the industry are working on the tech that you are trusting to manage your money and/or the money of others.
Developers on Enzyme
MLN is a utility token that is used to incentivize some of the top developers & security experts to contribute their time towards building, auditing and maintaining the protocol. Their work will help maintain (or grow) the AUM under the protocol allowing MLN to continue to hold some value.
Since the launch of Enzyme (v2) we’ve seen increased interest from developers to build on Enzyme; examples include Emiliano Bonassi & Simone Conti contributing towards the Synthetix integration, Unslashed insurance building a bridge to Enzyme, Gorilla Funds Building a new page builder to Enzyme Vaults. Theo (Founder of Multis wallet) building PoolTogether integration, Asgeir building BadgerDAO integration and TokenBlend (recent winners of HackMoney 2021) outlining how Enzyme could be used to automatically rebalance fixed weighted portfolios. There are others in the works…. Here’s a cheeky hint called Exponent.
Access for large Users
Parts of MIP7 are still under debate and one of the key points is about whether large users should subsidise smaller users with a flat percentage access fee. This discussion has been parked for now. However, the general thinking by the Council is that we are open to introducing thresholds in future where power users get rebates for the volume they bring to the network. Enzyme’s TVL growth has grown from strength to strength and we do think it will make sense to put it back on the table in the coming months.
Future planned utility
It has been planned for a while to evolve and add more utility to the MLN token. The details of this will be confirmed in the future and may involve things like locking up and staking an amount of MLN to make a governance proposal.
Conclusion
In short, MIP7 and more innovation around tokenomics is finally kicking in with the move towards becoming a utility token that grants access to the protocol. We believe this move is beneficial for users and ecosystem developers alike.
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