Meteora, a decentralized financial platform (DeFi) based on Solana (SOL), has proposed to allocate 25% of its total supply of MET tokens to a reserve for liquidity rewards and the token generation event (TGE).
The community's attitude towards this proposal is mostly optimistic. However, users expressed concerns about the sufficiency of liquidity at the time of launch.
How Meteora plans to utilize 25% of the MET reserve for liquidity and the token generation event (TGE)
The proposal was detailed on the Meteora governance forum. It anticipates allocating 20% to the liquidity rewards reserve. This reserve is intended for liquidity mining rewards to incentivize liquidity providers for two years following the TGE.
"To ensure that Meteora remains the best place for providing liquidity in the future, we propose to create a liquidity rewards reserve that will be strategically utilized by the Meteora team to attract liquidity providers," the proposal states.
It is likely to be used to match incentive tokens for large launches, continue the liquidity provider (LP) incentive plan (Season 2), and fund new programs to enhance user adoption and liquidity.
Additionally, the TGE reserve will receive 5% of the total token supply. This allocation is intended for initial liquidity provisioning, market making, and other TGE-related tasks.
"My personal opinion is that 5% is the lower limit, considering that we have 40% of circulating supply on day one, but we expect the LP Army to be able to cover the difference," wrote the proposal author, Soju.
Many users share Soju's opinion, emphasizing the need for sufficient liquidity at the time of the TGE.
"I like this proposal, and it really makes sense. However, I believe that 5% for MM may be too little. I understand that we have the LP ARMY to assist, but 40% on day one means that deep liquidity will be extremely important," commented a user.
This proposal follows previous initiatives from Meteora aimed at improving the token distribution strategy. On March 20, the platform announced two other proposals. The first aims to increase LP reward allocation from 10% to 15%. Additionally, 3% will be allocated for Launch Pools and Launch Pads.
The second proposal suggests allocating 20% of the total MET supply to the team's treasury. These tokens will be vested over six years, starting from the TGE.
Meanwhile, Meteora's strategic initiatives align with the increase in trader activity. According to DeFiLlama, trading volume on the DEX has risen by approximately 52.53%, increasing from $316 million in April to $482 million at the time of writing.
The platform also became the third largest network by fees last week, generating an impressive $21.6 million. Additionally, Meteora's fees significantly recovered in May, reaching $4.2 million in just the last 24 hours. Substantial fee generation indicates an extremely successful and engaged ecosystem.
"The Meteora airdrop could be one of the largest airdrops of all time," said a user, pointing to fees as a key factor.
Meteora's path, however, is not without obstacles. The platform is facing a class action lawsuit filed by Burwick Law in March for its alleged involvement in the LIBRA token scandal. In fact, following the collapse of the LIBRA cryptocurrency, Ben Chow, co-founder of Meteora, stepped down from leadership amid accusations of insider trading.#Write2Earn #BinanceSquare #Meteora #Binance #crypto $ETH
