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Version: Testnet - Blumbus

Monetary Policy

DYM asset details

PropertyDetails
TokenDYM\text{DYM}
Initial Total Supply1,000,000,000 DYM\text{1,000,000,000 DYM}
Decimals18\text{18}
Conversion1 aDYM=DYM×1018\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.

ParameterValue
Min Annual Issuance*2%2\%
Max Annual Issuance*8%8\%
Target DYM staked**50%50\%
Inflation rate of change*100%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(current staked ratioStaking target)]×Inflation Rate Change[ 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(55%50%)]×100%=10%[ 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%.