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Marinade’s stake distribution order and allocation process

Stake Allocation:
  • Stake distribution is managed through a unified pipeline, combining MNDE-directed votes and SAM bids to allocate Marinade’s entire TVL.
Distribution Mechanics:
  • Priority-Based Distribution: Stake is allocated starting from the highest-ranked validator down the list.
  • Constraint Checks: For each validator, the following constraints are verified before allocating stake:
    • Validator TVL Constraint:
      • Validators who do not have MNDE-Enhanced Stake directed to them are limited to a default stake cap of 2% of Marinade’s TVL. However, validators with MNDE-directed stake can increase this cap, allowing them to receive additional stake from the auction. (This mechanism helps prevent sybil attacks by ensuring only validators with genuine support through MNDE can exceed the standard cap.)
    • ASO/Country Constraints:
      • Ensures that staking to a validator does not exceed Solana's 30% concentration for ASO and 30% for Country.
    • Bond Balance:
      • Verifies that the validator’s bond balance is sufficient to cover downtime (PSR) and at least one epoch's worth of effective yield, including the bid.
    • Maximum Stake Wanted:
      • Considers the maximum amount of SOL the validator wishes to receive from the auction, as specified in their bond contract.
Stake Allocation Process:
  • Sequential Allocation: Stake is allocated to validators in order of their Max_Yield, subject to the above constraints.
  • Handling Ties:  
    • If two or more validators have the same Max_Yield, the remaining stake is split equally among them.
    • Constraint checks are performed in parallel to ensure fair distribution.
  • Completion: The process continues until all available stake is distributed or no further allocations are possible due to constraints.
  • Result: This process returns a list of validators sorted by Max_Yield, along with the amount of stake each validator is allocated.
Priority Adjustment:
  • Insufficient Allocation Scenario:  
    • If a validator's bid does not secure sufficient priority to receive the desired amount of stake, the validator may receive less stake or no stake.
    • Resolution: Validators facing this scenario should consider increasing their bid to achieve a higher staking priority and improve their chances of receiving the desired stake allocation.