Creating Value

Staking ❣️

Staking is the primary value accrual strategy of MAMA DAO. Stakers stake their MAMA tokens on the MAMA DAO website to earn harvest rewards. The harvest rewards come from the proceed from bond sales and can vary based on the number of MAMA tokens staked in the protocol and the reward rate set by monetary policy.

Staking is a passive, long-term strategy. The increase in your stake of MAMA translates into a constantly falling cost basis converging on zero. This means even if the market price of MAMA drops below your initial purchase price, given a long enough staking period, the increase in your staked MAMA balance should eventually outpace the fall in price.

When you stake, you lock MAMA and receive an equal amount of sMAMA. Your sMAMA balance harvests up automatically at the end of every epoch. sMAMA is transferable and therefore composable with other DeFi protocols.

When you unstake, you burn sMAMA and receive an equal amount of MAMA. Unstaking means the user will forfeit the upcoming harvest reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked MAMA (if any) will continue to receive harvest rewards.

Bonding 🍭

Bonding is the secondary value accrual strategy of MAMA DAO. It allows MAMA DAO to acquire its own liquidity and other reserve assets such as DAI by selling MAMA at a discount in exchange for these assets. The protocol quotes the bonder with terms such as the bond price, the amount of MAMA tokens entitled to the bonder, and the vesting term. The bonder can claim some of the rewards (MAMA tokens) as they vest, and at the end of the vesting term, the full amount will be claimable.

Bonding is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders bond discounts more or less unpredictable. Therefore bonding is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.

Bonding allows MAMA DAO to accumulate its own liquidity. We call our own liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since MAMA DAO becomes its own market, on top of additional certainty for MAMA investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.

What is the deal with (❣️,❣️) and (🤕,🤕)?

MAMAs love works best when everyone in the family are staking.

❣️, ❣️) is the idea that, if everyone see their MAMAs love being the most valuable, it would generate the greatest gain for everyone (from a game theory standpoint). Currently, there are three actions a user can take:

Staking and minting are considered beneficial to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding (minting) does not (we consider buying MAMA from the market as a prerequisite of staking, thus causing a price move). If both actions are beneficial, the actor who moves price also gets half of the benefit (+🍭). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+🍭), while the good actor who moves price gets half of the downside (🤕). If both actions are detrimental, which implies both actors are selling, they both get the worst possible outcome (🤕)!

Thus, given two actors, all scenarios of what they could do and the effect on the protocol are shown here:

If we both stake  (❣️,❣️), it is the best thing for both of us and the protocol (both users gets the MAMA's love).
If one of us stakes and the other one bonds, it is also great because staking takes MAMA off the market and puts it into the protocol, while bonding provides liquidity and DAI for the treasury!
When one of us sells, it diminishes effort of the other one who stakes or bonds.
When we both sell, it creates the worst outcome for both of us and the protocol (🤕,🤕)