Marinade Finance is a non-custodial liquid staking protocol built on Solana. Through Marinade, users are able to stake SOL tokens which the protocol uses to distribute to validators that participate in consensus, helping to secure the Solana network.
Why we staked a portion of our treasury in Marinade
Anyone following FABRIC’s journey over the past few months will be well aware of the success of our FAB PUNK NFT sale. Our PUNK sale sold out in just minutes of the mint opening, raising $2.4m in capital for our war chest. These treasury funds have been vital for us to manage protocol overhead, pay salaries, make crucial hires and continue to scale the FABRIC ecosystem.
Given the importance of these funds, internal discussions about how best to utilise them were plenteous. A number of asset diversification strategies were considered including derisking into stablecoins, buying NFTs, holding alts and going full degen yield farming. Given the illiquidity of NFTs, the lack of upside with stablecoins, high risk of dual token staking and potential for massive loss holding alts, we were left with one clear option… single side staking.
That’s where Marinade Finance comes in. After numerous successful calls with the Marinade team we came to the decision that we would stake a portion of our treasury funds in their protocol. Through staking in Marinade, we’ll be able to grow our treasury with the steady 6.67% APY whilst maintaining exposure to SOL and not having to worry about impermanent loss. Additionally, since there’s no SOL lockup period, if we ever need fast access to capital we won’t have to worry about unstaking periods.
Most importantly, our recent treasury staking will allow us to play a small, but crucial, role in the mission of decentralising Solana, as explained in the Marinade GitBook:
“One of the main propositions of blockchain networks is being censorship resistant. That means no nation, corporation or any other third-party has the power to control who can transact or store their value on the network.
In the Solana network there are nearly 1,100 validators where the top 19 validators currently have enough staking power to be able to halt the network. When Marinade started building, this power was owned by the top 11 validators — we found this to be a problem from a security perspective.
Marinade tackles this by delegating the stake to smaller but reliable validators, spreading this power to more validators (see our Delegation strategy). This should result in greatly increasing the number of validators with enough concentrated stake to halt the network.”
We will be continually assessing the FABRIC treasury and working to grow our funds, whilst ensuring that we aren’t taking unnecessary risks. We’re excited to open these conversations up to the FAB community, with the goal of giving full control of the treasury over to the FAB DAO in the future. 👋
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