MIP-009: Upgrade MPL Token Design

Overview: MIP009 proposes to upgrade the MPL token to MPLv2 in order to resource growth initiatives and add new MPL utility. This MIP contains the motivation, details on the technical transition and an evaluation of the benefits.

Motivation

Well-designed tokens can be a transformational tool for protocol growth when incentives are aligned and protocol development is enabled. Since Maple’s inception in 2021, MPL has been the protocol’s native token. Two years ago it was difficult to envision early success, the ‘credit-crunch’ of last year, the inflexibility of a fixed supply token and downsides of incentive programs.

As the industry evolves and matures, it’s natural that token designs should do so too. Building upon lessons learned along the way and reflecting on the new landscape and opportunity set, Core Contributors propose MIP009, for approval by the Maple DAO.

The motivation for a token upgrade is manifold, but in simple terms is to recapitalize the Maple Treasury to fuel commercial growth initiatives and establish new token utility creating sustainable, long-term growth for the Maple protocol.

Commercial growth initiatives:

New markets: Our roadmap extends to regions like APAC, LATAM and Europe, where opportunities for institutional adoption are very clear. Each market requires a different mixture of licensing, legal frameworks and rails like wallets and custody technology. As we move into these new markets we will address these specific needs to acquire new institutional customers and drive market penetration.

New sectors: With new sectors come new customers attracted by a particular offering. Sectors of significance include trade finance, energy finance, and accounts receivable factoring. By navigating into new sectors, Maple can become a diverse and vibrant capital marketplace.

New partnerships: Maple is already working on mutually beneficial partnerships with L2s, Custodians, DEXs and other Web3 Service providers and intend to bring these to market within the next year. Connecting to customers where they already are removes key UX frictions and helps tap into existing, established user bases to bring new Lenders to the Maple Marketplace, which in turn will drive growth of the lending pools and the protocol as a whole. New MPL utility:

Ecosystem Grants: With the aim to attract top-tier credit talent to the protocol, this initiative might see an Ecosystem Grant program provide seed funding to a new Delegate business, or see an initial capital allocation deposited into a pool to help a Delegate and their novel strategy to move from 0-1.

Pool Delegate alignment: Credit professionals choose Maple to start and scale lending businesses. So that both Delegates and Maple can grow together one idea is to require that Delegates allocate a portion of their fees to buying and staking MPL and to actively participate in Maple DAO Governance.

Borrower fee rebates: Attracting new Borrowers and keeping them on the platform is an important piece of establishing a credit network and Maple as a leader in lending. This initiative might see borrowers that hold and stake MPL become eligible for rebates which reduce the cost of capital. This creates a flywheel, making Maple a more attractive capital provider, thus resulting in more loans, more payments, and more fees for the Protocol.

Reduce Lender risk: By Introducing a limited guarantee system for MPL holders lending stablecoins to Pools, varying based on each Pool’s risk profile, this might provide Lenders some limited protection in case of defaults. In this instance, guarantees would be adjusted for risk and the level of MPL held, prompting Lenders to seek MPL during volatility.

Interoperability and transferability within DeFi: Core Contributors are investigating ways to incorporate LP tokens into other ecosystems in a compliant and scalable manner. By enhancing the liquidity and utility of MPL LP tokens, Maple aims to establish stronger connections with DeFi products and services, creating greater benefits for Lenders. One idea is to establish a vibrant secondary market for Pool deposit tokens. In this envisioned secondary market, Lenders requiring immediate liquidity might be able to swap their Pool tokens. Conversely, Lenders with longer-term horizons could purchase these Pool tokens at a discount.