Mango Monitor: June Edition
Mango enjoyed a busy start to Solana summer with an unexpected whale sighting, publication of our inaugural financial report and several contentious governance decisions. Below is a quick recap of key happenings in the Mango-verse.
Section I: Financial Report
The DAO published our inaugural financial review after months of preparation behind the scenes. The report features a detailed breakdown of all revenue and expenses since the protocol’s inception. The project also includes a breakdown of the treasury value and illustrative projections. We prepared summary slides in addition to the full working model available for all to review (slides, forum discussion, spreadsheet details).
This level of transparency is unprecedented within the Solana ecosystem. We understand the trust placed in Mango by all constituents whether traders, lenders or contributors. Open source financials enable better oversight of DAO spending and will help inform growth plans going forward. The robust USDC treasury should instill confidence for all community members that Mango will continue building regardless of market conditions and can be a trusted venue to deploy capital during these turbulent times.
We encourage everyone to check out the materials. These financials will be updated monthly going forward to provide ongoing disclosure. Questions or comments can be directed towards the forum post.
Section II: Whale Watching
Crypto markets suffered another painful drawdown during a weekend in mid-June. During this period, Solend revealed a whale account that had borrowed $108mm USDC against a 5.7mm SOL position ($170mm USD at $30 SOL).
As SOL prices dropped into the mid-$20s, this account was approaching its liquidation threshold of $22. There were substantial concerns around the capacity of Solend’s liquidators and on-chain markets generally to absorb the sell pressure catalyzed by this potential liquidation. We won’t recap the full details but Solend made some difficult decisions during a chaotic time to protect their other constituents.
Several days later, this account began moving some of its lending into Mango. The borrower now has 2mm SOL in Mango with $40mm USDC of outstanding borrowings against this balance. Within 24 hours of the deposits, Mango contributors proposed several tweaks to safeguard against any black swan scenarios. Ultimately, only one modest change was made.
The approved change was an increase in USDC’s maximum borrow rate from 150% to 300%. This rate only applies during extremely high utilization and ensures lenders should always have liquidity to withdraw their capital. The community decided against two other proposals that would have increased the steady state borrowing costs for SOL and USDC. (Links: Forum discussion; votes for USDC max; USDC optimal; SOL optimal).
Overall this experience is a testament to our community’s agility and the established governance framework. The DAO weighed several responses and, after thoughtful deliberation, opted to only make minor changes while respecting due process.
We look forward to working with our new w̶h̶a̶l̶e̶ VIP customer and providing them ample liquidity at reasonable rates. As always, the account can be monitored in real time here and all accounts can be searched via Mangolorians.
Section III: Leaderboard Feature
We have introduced a new feature to encourage some friendly competition within our trading community. The UI now has a leaderboard tab that shows account PNL over various time periods with filters for spot- or futures-only profits.
The tool helps traders keep track of their performance vs. peers. Studious traders could also use it to identify successful accounts and learn from their tactics.
The DAO plans to host regular competitions with this feature. The first contest is a spot trading challenge with a 400k SRM prize pool. This launches on July 18th so start getting ready now. Additional details in the upcoming events section below.
Section IV: Governance Updates
In addition to the borrowing changes and financials release, the DAO had a few other notable governance decisions this quarter.
- As referenced above, we are deepening our partnership with Serum. The Serum DAO approved our grant request to launch a trading competition and improve spot market liquidity.
- GM, our trader relations sub-DAO, ended the off-chain market maker incentive program after its 8-week pilot period. They will be analyzing the results of the experiment and return with a recommendation later in July on an optimal incentive structure going forward (forum).
- The Marinade token purchase was voted down after several months of deliberation. The DAO remains excited about our partnership with Marinade and supports their decentralization goals. However, treasury funds are precious and should be deployed judiciously (vote part 1 and 2).
- Castle DAO proposed a pilot treasury allocation of $500k USDC into their aggregator product. The vote failed to pass but there may be a re-vote later this summer once Castle makes some requested modifications.
- Our friends at Squads had a twitter thread reviewing Mango’s governance process and the pioneering role we’ve had in the Solana ecosystem. Check out the thread embedded above.
Section V: Composability Corner
Two major integrations were released this month. Both should expand access to Mango and deepen liquidity. Note we have not audited nor are we endorsing these projects. DYOR and diversify your assets.
Investin, the permissionless investment fund manager, incorporated additional functionality for its Mango integration. Investin managers can now access Mango’s full slate of perpetual listings. Aspiring managers can launch market making products, basis trades strategies or directional funds within minutes and easily raise fee-paying outside capital to help increase their scale.
This year has demonstrated the pitfalls of opaque investment vehicles, dubious returns and hidden leverage. Investin provides complete transparency, full product coverage and guaranteed liquidity. Now is a great time for ambitious managers to get started building a track record and capitalize on depressed market conditions. See more on Investin here.
Xenon launched their mainnet product this month to select alpha participants. The protocol creates an on-chain prime broker where collateral value is shared across multiple individual DeFi applications. This structure increases capital efficiency for users since collateral isn’t trapped in specific verticals.
The current release includes Mango, Solend, Jupiter and others. For instance, traders could use Solend deposits (cTokens) to help collateralize their positions on Mango. The capital efficiency should translate to increased liquidity and tighter spreads across DeFi. Checkout more details here and alpha spots may be granted to the first few people who join their discord and ask with promo code Mango Monitor.
Section VI: Upcoming Events
- Our trading competition with 400k SRM in prizes begins July 18th. The rewards are paid out weekly with prizes for both spot volume market share and aggregate PNL. Join the discord for full details and any questions.
Additional Resources
- Website: https://www.mango.markets
- Discord: https://discord.gg/mangomarkets
- Referral link for fee discount: https://trade.mango.markets?ref=bsmith
- Twitter: https://twitter.com/mangomarkets
- DAO Forum: https://forum.mango.markets
- Github: https://github.com/blockworks-foundation
