# Monetary Policy

## DYM asset details

Property | Details |
---|---|

Token | $\text{DYM}$ |

Initial Total Supply | $\text{1,000,000,000 DYM}$ |

Decimals | $\text{18}$ |

Conversion | $\text{1 aDYM} = \text{DYM} \times 10^{-18}$ |

## DYM Issuance

The issuance of DYM tokens is a dynamic process based on the proportion of DYM tokens staked relative to the total supply. The Dymension protocol algorithmically operates on a set of predefined parameters.

Parameter | Value |
---|---|

Min Annual Issuance* | $2\%$ |

Max Annual Issuance* | $8\%$ |

Target DYM staked** | $50\%$ |

Inflation rate of change* | $100\%$ |

** These parameters can be adjusted through onchain governance.*

*** RollApp bonds do not contribute to this staking calculation.*

### Algorithmic Issuance

The Dymension protocol adjusts the DYM issuance rate based on the actual staking ratio relative to the target:

**Below Target Staking**: If the percentage of staked DYM is less than the target of 50%, the issuance rate will incrementally increase. This adjustment continues until it reaches the maximum rate of 8% or until the staking target is met.**At Target Staking**: When the staking ratio aligns with the 50% target, the current issuance rate remains unchanged.**Above Target Staking**: If the percentage of staked DYM is greater than the target of 50%, the issuance rate will incrementally decrease. This adjustment continues until it reaches the minimum rate of 2% or until the staking target is met.

### Rate of Change Formula

The rate at which the DYM issuance adapts over the year is quantified by the following formula:

$[ 1 - (\frac{\text{current staked ratio}}{\text{Staking target}}) ] \times \text{Inflation Rate Change}$

#### Example

*For actual data please visit the Portal*

- Current Inflation Rate: 21%
- Current Staked Ratio: 55% (i.e., total supply of DYM is staked)
- Staking Target: 50%
- Inflation Rate Change: 100%

$[ 1 - (\frac{55\%}{50\%}) ] \times 100\% = -10\%$

The result of 55% staked DYM is a -10% absolute reduction in the inflation rate over the year resulting in an inflation rate 11%.