Beyond Staking: Turn Endorsements into Yield

Dymension

Dymension

— 2 min read
Beyond Staking: Turn Endorsements into Yield

With the upcoming Beyond upgrade, Dymension users will unlock a new, low-risk yield opportunity that goes beyond protocol staking: Endorsement Yield.

Building on the existing Endorsement system, DYM stakers who vote for their favorite RollApps will now be able to earn rewards, directly and onchain.

Overview

What’s Endorsement?

Before diving into the new Endorsement Yield feature, let’s align on the existing Endorsement functionality in the Dymension protocol.

Endorsement is an already existing voting system where DYM stakers decide how to allocate protocol incentives across RollApps and liquidity pools. The more DYM you stake, the more influence you have over where rewards go.

Since the 3D upgrade DYM stakers have had the ability to Endorse and affect the distribution of protocol incentives. However, endorsers currently lack incentive to participate, with no direct way to capture value for themselves. If a RollApp creator wishes to create that incentive and attract endorsers with rewards, the creator needs to take periodic snapshots and distribute rewards manually, an off-chain and error-prone workaround. This process is:

  • Manual and inefficient
  • Not scalable across many RollApps
  • Not part of the core Dymension protocol

Endorsement Yield transforms this dynamic with protocol-level payouts.

As part of the upcoming Beyond upgrade, DYM stakers will be able to receive rewards in exchange for voting through the Endorsement feature.

How does Endorsement yield work?

In short, RollApp creators determine an amount of incentives which will get paid out to stakers who vote for them.

Endorsement yield embeds an incentive mechanism directly into the protocol. Rewards can be streamed to endorsers transparently in return for the endorsement.

Endorsement Voting Rights

  • DYM stakers receive endorsement voting rights based on their staked amount.
  • DYM stakers allocate these endorsement voting rights across RollApps and/or liquidity pools they wish to support.
  • Each RollApp or pool accumulates an “endorsement weight” which determines the amount of DYM earned.

Reward Streams

  • RollApp creators fund a reward stream for their endorsers.
  • Reward stream can use any token, not just the RollApp token, giving creators more options to compete for endorsements.
  • At every epoch, rewards are distributed to endorsers according to weight.

Example

  • 100,000 DYM is allocated for RollApp and Pool incentives for the month using the standard onchain governance procedure.
  • RollApp X gets 10% of the total endorsement weight and earns 10,000 DYM for that given month.
  • RollApp X funds a reward steam of 10,000 RollApp $X native tokens for its endorsers for the same given month.
  • Alice endorses RollApp X voting with the entire power of 90 staked DYM while Bob votes with the voting power of 10 staked DYM.
  • In this case, Alice receives 9,000 RollApp $X native token and Bob receives 1,000 $X for this given month.

Earning on Dymension

Users can endorse RollApps directly on the Portal and view all other Dymension earnings sources. Beyond endorse yield, users can earn on Dymension in various ways such as:

  • Royalties: Creating a token and earning 50% of swap fees.
  • Bridge LP: Providing withdrawal liquidity for a fee.
  • Pool LP: Providing liquidity for Dymension’s DEX swaps

Next steps

The new Endorsement yield ties incentives directly to community support. With the Beyond upgrade, your influence as an endorser comes with tangible yield. And as a RollApp creator or liquidity pool, rewarding your early supporters has never been easier or more transparent.

Get ready for the upcoming Beyond release set to grow the Dymension ecosystem.