No, MAIA is not a stablecoin. Rather, MAIA locked in the sMaia (staked Maia) form represents the holder's share of the revenue generated by the protocol.
MAIA provides free-floating value its users can always fall back on, simply because of the fractional treasury reserves MAIA draws its intrinsic value from.
There are 2 major ways you can interact with MaiaDAO:
The first, and most valuable sharing your input with the community. You can reach us in Twitter, Discord (check the Contributions tab) or Telegram links in the Social
The second one being Minting or Buying Maia on market and staking it. This “strictly economic” interaction should however be accompanied by checking our social’s, we want everyone to stay tuned for new opportunities and updates!
Each MAIA is backed by 1 m.USDC, not pegged to it. Because the treasury backs every MAIA with at least 1 m.USDC, the protocol would buy back and burn MAIA when it trades below 1 m.USDC. This has the effect of pushing MAIA price back up to 1 m.USDC. MAIA could always trade above 1 m.USDC because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1.
You might say that the MAIA floor price or intrinsic value is 1 m.USDC. We believe that the actual price will always be 1 m.USDC + premium, but in the end that is up to the market to decide.
At a high level, Maia consists of its protocol managed treasury, protocol owned liquidity (POL), bond mechanism (minting), and high staking rewards that are designed to control supply expansion.
Bonding in the "Mint" generates profit for the protocol, and the treasury uses the profit to mint MAIA and distribute them to stakers. With LP bond, the protocol is able to accumulate liquidity to ensure the system stability.
(3,3) is the idea that, if everyone cooperated in Maia, it would generate the greatest gain for everyone (from a game theory standpoint). Currently, there are three actions a user can take:
- Staking (+2)
- Bonding (+1)
- Selling (-2)
Staking and bonding are considered beneficial to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding does not (we consider buying MAIA 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 (+1). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+1), while the good actor who moves price gets half of the downside (-1). If both actions are detrimental, which implies both actors are selling, they both get half of the downside (-1).
Thus, given two actors, all scenarios of what they could do and the effect on the protocol are shown here:
- If we both stake (3, 3), it is the best thing for both of us and the protocol (3 + 3 = 6).
- If one of us stakes and the other one bonds, it is also great because staking takes MAIA off the market and put it into the protocol, while bonding provides liquidity and m.USDC for the treasury (3 + 1 = 4).
- When one of us sells, it diminishes effort of the other one who stakes or bonds (1 - 1 = 0).
- When we both sell, it creates the worst outcome for both of us and the protocol (-3 - 3 = -6).
As the protocol controls the funds in its treasury, MAIA can only be minted or burned by the protocol. This also guarantees that the protocol can always back 1 MAIA with 1 m.USDC. You can easily define the risk of your investment because you can be confident that the protocol will indefinitely buy MAIA below 1 m.USDC with the treasury assets until no one is left to sell. You can't trust the FED but you can trust the code.
As the protocol accumulates more PCV, more runway is guaranteed for the stakers. This means the stakers can be confident that the current staking APY can be sustained for a longer term because more funds are available in the treasury.
Maia acquired some of its liquidity thanks to its bond mechanism. This has several benefits:
- Maia does not have to pay out high farming rewards to incentivize liquidity providers a.k.a renting liquidity.
- Maia guarantees the market that the liquidity is always there to facilitate sell or buy transaction.
- By being LP (liquidity provider), it earns LP fees which represents one of the current sources of income for the treasury.
- All POL can be used to back MAIA. The LP tokens are marked down to their risk-free value for this purpose.
Rebase is a mechanism by which your staked MAIA balance increases automatically. When new MAIA are minted by the protocol, a large portion of it goes to the stakers. Because stakers only see staked MAIA balance instead of MAIA the protocol utilizes the rebase mechanism to increase the staked MAIA balance so that 1 staked MAIA (sMAIA) is always redeemable for 1 MAIA.
Reward yield is the percentage by which your staked MAIA balance increases on the next epoch. It is also known as rebase rate. You can find this number on the Maia staking page.
APY stands for annual percentage yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of Maia, your staked MAIA represents your principal, and the compound interest is added periodically on every epoch (8 hours) thanks to the rebase mechanism.
One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of 2%, if you start with a balance of 1 MAIA on day 1, after a year, your balance will grow to about 1377.
The APY is calculated from the reward yield (a.k.a rebase rate) using the following equation:
Consider there are 365 days in a year, this would give a rebase frequency of 365 * 3 = 1095.
Reward yield is determined by the following equation:
The number of MAIA distributed to the staking contract is calculated from MAIA total supply using the following equation:
Note that the reward rate is subject to change by the protocol.
As illustrated above, your MAIA balance will grow exponentially over time thanks to the power of compounding. Let's say you buy a MAIA for $400 now and the market decides that in 1 year time, the intrinsic value of MAIA will be $2. Assuming a daily compound interest rate of 2%, your balance would grow to about 1377 MAIA by the end of the year, which is worth around $2754. That is a cool $2354 profit! By now, you should understand that you are paying a premium for MAIA now in exchange for a long-term benefit. Thus, you should have a long time horizon to allow your MAIA balance to grow exponentially and make this a worthwhile investment.
There is no clear answer for this, but the current intrinsic value can be gauged by the treasury performance. For example, if the treasury could guarantee to back every MAIA with 100 m.USDC, the intrinsic value will be 100 m.USDC. It can also be decided by the future DAO. For example, if the DAO decides to raise the price floor of MAIA, its intrinsic value will rise accordingly.
Let’s say the protocol targets an APY of 100,000%. This would translate to a rebase rate of about 0.6328%, or a daily growth of about 2%. Please refer to the equation above to learn how APY is calculated from the rebase rate.
If there are 100,000 MAIA tokens staked right now, the protocol would need to mint an additional 2000 MAIA to achieve this daily growth. This is achievable if the protocol can bring in at least 2000 MIM daily from bond sales. If the protocol fails to achieve this, the APY of 100,000% cannot be guaranteed.
No. Once you have staked MAIA with Maia, your staked MAIA (sMAIA) balance will auto-compound on every epoch. That increase in balance represents your rebase rewards.
You can track your rebase rewards by calculating the increase in your staked MAIA balance.
1. Record down the Current Index value on the staking page when you first stake your MAIA. Let's call this the Start Index.
2. After staking for some time, if you want to determine by how much your balance has increased, check the Current Index value again. Let's call this the End Index.
3. By dividing the End Index by Start Index, you would get the ratio by which your staked MAIA balance has increased.
Maia is currently not audited! It is a fork Wonderland that is a fork of Olympus DAO, audits will occur at a later stage.
Here at Maia we believe that minting better describes the action that users are taking, when purchasing MAIA with different assets. If you go to the "Mint" page of the website, you will be able to mint MAIA tokens, effectively selling your assets for discounted MAIA tokens. Despite the name difference, the process is exactly the same as a Bond Purchase on Olympus DAO!