Magma - A Monad Project Set to Erupt
Introduction to a community-owned liquid staking project using DVT
Just like volcanoes were there at the beginning of time, Magma was built to grow at the birth of Monad.
As a DAO-owned Liquid Staking Protocol designed for equitable token distribution via a competitive points system and the first Distributed Validator Technology (DVT) outside of Ethereum, Magma is setting the bar high.
That was a mouth full. Let us explain a bit more in this intro article where we will dive into what we are building.
First things first…
Why Monad?
Monad is an EVM L1 chain that is the fastest, cheapest, and most censorship resistant.
Built with performance in mind, Monad blows other blockchains out of the water supporting 10,000 transactions per second. This significantly increases throughput capacity, opening the door for even more high-volume and complex applications that are looking to run in a decentralized manner.
Their vision was picked up by investors in the current builders market, resulting in an amazing $19M raise led by Dragonfly Capital.
Hello, is it DAO I am looking for?
Magma has deliberately chosen a DAO structure.
We believe the DAO format presents a perfect midway between total centralization and decentralization, as it allows for the development of competitive products that are needed by users without the need for full centralization and custody on an exchange, and all that comes with it.
So why is this ideal for us?
First of all, we are building for the community and the best way to do that in our experience is to build WITH the community. A DAO fosters a more socially conscious decision making process, ensuring that we are building what you need.
A DAO’s tokenomic structure makes it possible to fund protocol development and upgrades using the DAO’s token treasury, meaning that every development is paid for AND supported by the community.
The DAO also provides for several management activities by leaning on the capabilities of it’s members. This adds on to the capabilities of the team, making 1+1 = 3 a reality.
On top of that, the DAO will collect Magma’s fees, channeling them into the treasury where it can be utilized for insurance and further development based upon decisions made by the DAO. A perfect circle.
Liquid Staking FTW
All of Web3 has been in the band of the Ethereum merge, dubbed by some as an apocalyptic event that would end all of crypto. In the wake of that merge, Lido DAO provided a solution by introducing Liquid Staking. This basically means that one can stake ETH, get a stETH token in exchange, which in turn can be used to trade that staked share.
This has resulted in an increase in stakers, now broken free from old restraints, to the Ethereum ecosystem and has brought many larger players into the fold.
Magma will allow Monad’s token holders to receive staking rewards, whilst remaining liquid by providing all users that stake in Monads DPOS consensus with liquid staked tokens as a representation of their stakes. In turn, these can then be traded, as if the staked tokens were liquid.
DVT for the Masses
Distributed Validator Technology, or DVT, is a way to increase decentralization in a decentralized network. It was pioneered on the Ethereum blockchain and has offered a wide range of benefits to users and stakers such as: Lowering the threshold to run a validator node, increasing decentralization, and thus, the effect of potential bad actors as it reduces the risks of slashing due to liveness faults or other criteria.
Sounds great, but what does it mean?
Think of it as a group of people processing your request for a driver's license at the DMV instead of one person (No offense Gary, we love you).
Through the application of DVT, validation runs through a sort of mini network that each contains a piece of the private key needed to sign the validation on a transaction. This way, even when a portion of the computers are not online due to any given reason, a transaction can still be processed if the majority of the mini network is in consensus.
DVT is important for Magma since a reduced risk of slashing makes staking safer and thus, increases the safety of our liquid staking protocol.
The other reason DVT is so important is because the increased decentralization ensures less power for individual operators to influence the protocol.
This decentralization does not only remain with Magma, but the full Monad ecosystem that can benefit from it, making Monad even more decentralized.
Keep an Eye on that Drip
The final feature that we will be announcing today is Magma Points, a points-program that is engineered to significantly boost and support community participation for both Magma and the Monad ecosystem as a whole.
Forget everything you learned on X about community programs, we are rewriting the handbook.
We will launch the Magma Points program which will pull the ecosystem into a competition of the ages for which all projects building on Monad are automatically eligible. More details to come on that.
For 5 years, Magma will incentivize building on Monad.
Magma Points will result in Magma being engaged by Monad’s best and brightest projects, giving the entire ecosystem a good vision of the DAO.
And for a little bit more on that DAO; None of the locked tokens from any of the team members, advisors and early supporters will count towards governance, giving them less and less influence over the protocol. As time goes on, Magma’s team will hold a continuously decreasing share of protocol governance as the token distribution widens across all of Monad, like magma dripping gushing out of a volcano.
How is that for decentralization?
We are happy to welcome you all into the warmth of Magma and hope you will be a part of our continuous contribution to Monad and to the Web3 space in general.
Follow us on Twitter and take part in the discussion or check out our new Discord to participate in the discussion.