Summary of Proposal
In summary, the proposal takes a closer look at the Melon token economics (Melonomics) and lays out arguments to reconsider the value accrual mechanism. In particular, it argues for a value accrual mechanism that is directly linked to growth in the Assets Under Management in Melon Protocol funds vs. the number of individual Melon Protocol funds. Crucially, it also argues for a removal of any fee at fund “set up” in order to entirely remove any friction for new users entering the platform and deploying a Melon fund on the blockchain. Interesting to note is also a sub-proposal to give holders of MLN discount to fees on the protocol and the argumentation to commit towards reducing inflation in later years.
Including User Representatives
The Melon Council was originally formed to distribute control away from a single entity into the hands of technical experts and active users of the Melon Protocol.
Since the activity on the Melon Protocol was not significant enough to identify active users in the early days (shortly after going live on Ethereum mainnet), there was not much justification for building up the user-representative component of the Melon Council DAO.
With usage continuing to grow at a steady pace consistently over the last few months and interest in the Melon Protocol dynamics reaching through the whole DeFi ecosystem, the current Melon Council members feel it is the appropriate timing to add direct user representatives to the DAO as any changes towards fees and fee structures, impacting all current and future Melon fund managers, should not be done without user-representation.
A Call to Users to Join the Melon Council
There are currently two available spots on the Melon Council DAO for user representatives. As per the statutes of the Melon Council DAO, the conditions around user representatives joining the DAO are as follows:
(i) Melon fund managers must run more than 1% of the total protocol assets under management on the Melon protocol (measured in ETH terms) within their Melon fund
(ii) Melon investors (individually or as part of its business) should be provably highly invested in a Melon fund
In addition, each applicant must confirm that it will abide by the following behavioural rules and satisfy the following requirements:
- Willingness and ability to dedicate time and resources to the Council activities
- High evidenced ethical standards and good reputation
- Willingness to reveal identity
- Full up-front disclosure of any conflict of interest before joining the Council
- Full up-front disclosure before participating in a vote where the member has a conflict of interest with the outcome and abstaining from that vote
- Confirmation that it is acting on its own behalf and not for any undisclosed beneficiaries
Melonomics Working Group
The Melon Council DAO has recently divided itself into working groups, which tackle specific areas and report their findings back to the Melon Council at large to reach consensus. The Melonomics Working Group will focus on the next steps outlined below, will survey current and potential future users of the Melon Protocol on the proposed changes and work in collaboration with the MIP #7 authors and new user representatives joining the Melon Council to make progress on the proposal.
Timeline for MIP #7
- MIP #7 Proposal submitted
- First round of community feedback in Github as well as Telegram channel discussion (Reference: https://github.com/melonproject/MIP/issues/7)
- User representatives apply to the Melon Council DAO
- Qualifying users are presented and users can nominate qualifying representatives via the ‘Melon Cafe’ Telegram channel
- Period to consider any other proposals made on the subject of tokenomics
- Melonomics Working Group evaluates proposal and provides internal independent token models Final round of feedback from the Melon Protocol community
- Melon Council officially votes on the MIP#7 proposal via the Aragon DAO
- Implementation is discussed and planned, any parts of the proposal that pose technical limitations could be re-evaluated
- If all above steps are completed successfully the proposal will be implemented on main-net
The Melon Council