1. Title

Fee Switch Buyback Mechanism: MIN Staking Rewards Reform (Temp Check)

2. Type of MIP

Constitutional

3. Self-introduction of the Member

AQube is a specialized firm in blockchain economic research, DeFi strategy, and tokenomics optimization. The firm applies a structured, research-based methodology to token restructuring, liquidity planning, and incentive system design. Experience includes:

• $400M+ TVL supported across DeFi protocols
• $6M+ fundraising supported for blockchain projects
• Strategic liquidity and tokenomics models across multiple DeFi platforms
• Minswap General Report: produced a General Report on Minswap tokenomics, covering tokenomic dynamics, liquidity and treasury management, and a solutions framework that underpins the first DAO proposals on tokenomics restructuring
• MIN token burn proposal: designed and proposed the One-Time General MIN Token Burn for Minswap DAO, which passed on 2025-10-03 with 99.67% support and resulted in burning 500,000,000 MIN from the Yield Farming Reserve

4. Scope of Change

Authorize Minswap Labs to convert the weekly ADA fee switch allocation to stakers into purchased MIN and to distribute that MIN to MIN stakers in the same period, with weekly execution cadence.

Option A: Full replacement
100% of the ADA Fee Switch buys MIN and is distributed to stakers as MIN each week.

Option B: 50% Conversion
50% of the ADA Fee Switch buys MIN and is distributed as MIN. The other 50% is distributed as ADA.

Option C: Dynamic Split
Each week the Emissions Committee splits the ADA Fee Switch across three buckets that sum to 100 percent: ADA paid as ADA, ADA converted to MIN and distributed, ADA converted to MIN and burned. Labs executes the split with weekly cadence. A weekly report discloses the chosen split and the rationale.

5. Motivation

Minswap operates in a mature, fee-anchored regime. The DAO has already retired reserve supply, establishing supply discipline. This proposal extends that path to staking by routing fee switch value into recurring market demand for MIN and by making rewards MIN-centric without adding emissions.

What this proposal aims to achieve
• Alignment: make MIN the unit of account for staking, so staker incentives match protocol health.
• Demand creation: convert the ADA fee switch allocation into recurring MIN buy pressure sized by governance.
• APR continuity: preserve dollar APR in expectation by converting ADA and returning purchased MIN in the same period, subject to prices and fees.
• Operational clarity: weekly cadence, disclosed multisig, standard public ledgers, no new issuance, no fee rate change.

How the two options map to the goal
Option A, Full replacement
Immediate alignment. All weekly fee switch ADA buys MIN and all rewards are paid in purchased MIN. Maximizes fee-funded demand and keeps execution simple.

Option B, 50% Conversion
Balanced alignment. Builds steady MIN demand while preserving ADA payout continuity for user needs.

Option C, Dynamic Split
Flexible alignment. Protects participation by keeping an ADA leg when needed, builds demand by converting a share to MIN for distribution, and enables targeted buyback-and-burn.

6. Rationale

This chapter shows how fee-switch buybacks would have worked from 2024-09 to 2025-09 under Option A, 100 percent conversion, and Option B, 50 percent conversion. For each month we report ADA fee-switch inflow, then potential buy pressure in MIN and in USD using a monthly ADAUSD VWAP.

Cumulative potential buybacks from 2024-09 to 2025-09:

• Option A: 55,360,498.11 MIN and 1,600,294.50 USD.
• Option B: 27,680,249.05 MIN and 800,147.25 USD.

Pricing:

• Monthly MIN price: volume weighted average of daily MINUSD across the calendar month, with each day weighted by that day’s MIN USD trading volume.
• Monthly ADA price: volume weighted average of daily ADAUSD across the calendar month, with each day weighted by that day’s ADA USD trading volume.
• Monthly MIN to ADA ratio: volume weighted average of the daily MINUSD to ADAUSD ratio across the calendar month, with weights based on MIN USD trading volume.

7. Key Terms

• Fee switch: the share of swap fees routed to stakers.

• Purchased MIN: MIN acquired on the market using the converted ADA and distributed to stakers.

• ADA floor: the minimum percentage of rewards kept in ADA under Option C.

• Emissions Committee: existing body responsible for emissions planning. Under this proposal it is additionally authorized, if Option C is selected, to set the weekly ADA floor.

• Period: the reward and execution window for this mechanism.

• Execution VWAP: size weighted average price of all fills in the reporting period.

• Execution window: the time block within the period when conversions are performed.

• Slippage limit: the maximum allowed price impact per order during conversion.

• Shortfall: any ADA not converted due to liquidity or limits, carried forward to the next period.

• Staging wallet: the address that temporarily holds purchased MIN before distribution.

• Conversion wallet: the address that executes ADA to MIN purchases.

• Reporting ledger: the public weekly post with ADA converted, MIN purchased and distributed, MIN purchased and burned, prices, fees, shortfalls, wallets, and txids.

• Burn: permanent removal of MIN from circulation by sending it to an irrecoverable address.

• Burn allocation: the percentage of funds designated for burn in a given period.

• Txid: transaction identifier published for on chain verification.

8. Specifications

Platforms and components

• Chain and asset: Cardano L1. MIN is a native asset.
• Funding source: ADA fee switch allocation to stakers.
• Period: 1 week.
• Distribution asset: purchased MIN and ADA per the selected option.
• Custody: Labs multisig controls the ADA conversion wallet and a staging wallet for purchased MIN. Weekly reports publish addresses and txids.
• Governance and oversight: the Emissions Committee manages ADA floor adjustments under Option C and publishes rationale in the weekly report.

Mechanism details
Common operating runbook

• Compile inputs: ADA allocation for the week, payout split if Option C (percent ADA payout, percent to MIN distribution, percent to MIN burn), pricing window, slippage limit.
• Move funds: route ADA to the conversion wallet.
• Execute burn leg: convert the burn allocation to MIN and send to the burn address. Record execution price and fees.
• Execute distribution leg: convert the MIN distribution allocation to MIN within the pricing window, respecting the slippage limit. Record execution price and fees. Move purchased MIN to the staging wallet.
• Distribute: send ADA payout to stakers and send purchased MIN from the staging wallet to stakers according to the week’s composition.
• Report: post the weekly ledger with ADA paid, ADA converted, MIN delivered, MIN burned, execution VWAPs, fees, any ADA shortfall, the payout split if Option C, wallet addresses, and txids.

Option A: Full replacement

• How it works: convert 100% of the weekly ADA fee switch allocation to MIN bought on the market and distribute in the same week.
• Reward composition and timing: All rewards paid in purchased MIN.

Option B: 50% Conversion

• How it works: convert 50% of the weekly ADA allocation to MIN and distribute in the same week. Pay the remaining 50% in ADA.
• Reward composition and timing: 50% purchased MIN, 50% ADA Fee Switch.

Option C: Dynamic ADA Floor

• How it works: the Emissions Committee sets the weekly three-way split across ADA payout, buyback MIN to distribute, and buyback MIN to burn. Execute the burn leg first, then the distribution leg. All actions complete within the same week.
• Reward composition and timing: Mix of ADA and purchased MIN set by the split.

Execution window

• Weekly order: snapshot, pricing window, conversion, burn, distribution, public post.
• Execution timing within each week is at Minswap Labs’ discretion, within the defined pricing window

Data and auditability

• Weekly post includes: ADA paid, ADA converted, MIN delivered, MIN burned, execution VWAPs and fees, any ADA shortfall, the payout split if Option C, wallet addresses and txids.

9. Steps to Implement

Governance

• Temp Check: present the three options, the fee switch buyback mechanism for staker rewards, execution authority (Minswap Labs), reporting cadence, and, for Option C, the Emissions Committee mandate to set and adjust the weekly split.
• On-chain vote: select one option and set the start week.
• Mandate: authorize Labs to execute on the approved cadence and publish the weekly report.

Execution

• Pre-checks and staging as specified. Disclose conversion and staging wallet addresses.
• Launch: in the first full week after passage, begin weekly operations.
• Publish: issue the weekly report as defined in the Report subsection.

10. Timeline

• Forum Discussion: 7 days.
• Temp Check: 7 days.
• On-chain vote: starts within 7 days after Temp Check passes, lasts 7 days.
• Pre-execution setup: up to 3 business days after vote passage.
• Go-live window: first full week after the vote.
• First reporting: within 3 business days after the first run closes.

11. Overall Cost

• External spend: $4,000 success-based consulting fee to AQube, payable only if this proposal passes and is implemented.
• Emissions Committee compensation (Option C only): +$50 per member per month stipend and +$50 per member per committee bonus vote for the added analytics and monitoring.
• Network fees: minimal, reported with actuals in weekly posts.
• Manpower: executed by Minswap Labs using multisig and standard operations. No third-party grants.
• Recurring costs: none, other than the conditional Option C committee compensation.