Distribution

An overview of the Distribution Module.

Overview

The distribution module enables a simple collection and distribution mechanism to passively distribute rewards between validators and delegators.

Summary

Key Concepts and Definitions

Community Pool: a pool of tokens funded by a portion of staking rewards (community_tax) that the dYdX community could use to fund contributor grants, community initiatives, liquidity mining, and other initiatives.
Distribution ModuleAccount Account: an account that collects and distributes trading and transaction fees among validators, delegators, and the community pool.
Staking Rewards: the total portion of the Fee Pool that a DYDX staker can claim at a given block.
Fee Pool: fee pool from maker trading fees (USDC), taker trading fees (USDC), DYDX-denominated gas fees from transactions, and USDC-denominated gas fees from transactions for a given block.
Staking Rewards Withdrawal: a DYDX staker may claim their portion of the Fee Pool for each block. If a DYDX staker does not claim staking rewards, their respective rewards will accrue in the Distribution ModuleAccount Account.
Total Bonded Power: the sum of all tokens that are currently staked by validators to themselves and tokens staked to validators by DYDX holders.
Block Rewards: fees distributed to validators and delegators for successfully proposing and validating a new block on the blockchain.

Parameters

The dYdX Community may adjust these parameters with an on-chain governance proposal.

Title

Value

Description

A tax that directs a percentage of the fee pool to the community pool.

Part of the block reward reserved for the validator that proposes a given block.

Bonus incentive for block proposers based on the number of transactions included in a given block.

True

Whether a delegator can set a different withdrawal address (other than their delegator address) for their rewards.

Staking Rewards

On the dYdX Chain, all transaction fees (trading fees denominated in USDC, DYDX-denominated gas fees from transactions, and USDC-denominated gas fees from transactions) collected by the protocol will be distributed to validators and DYDX holders that stake to dYdX Chain validators.

The Cosmos x/distribution module is a simple mechanism to allocate rewards earned by Validators and Stakers. For a detailed understanding of the Cosmos rewards mechanism, read here.

How rewards are distributed on dYdX Chain

DYDX holders who stake to (a) validator(s) are entitled to a portion of the following fees:

DYDX-denominated gas fees from transactions,
USDC-denominated gas fees from transactions,
USDC maker trading fees, and
USDC taker trading fees.

Fees will accrue in the Distribution ModuleAccount Account each block. Each block a DYDX staker may claim their portion of Staking Rewards. If a DYDX staker does not claim Staking Rewards, their respective rewards will accrue in the Distribution ModuleAccount Account.

Note, Staking Rewards are not automatically staked to a dYdX Chain validator. Any DYDX earned by a staker as Staking Rewards will need to be claimed from the Distribution ModuleAccount Account and staked to a dYdX Chain validator to contribute to the security of the network and qualify to earn staking rewards.

How staking rewards are calculated

Fee Pool = fee pool from maker trading fees (USDC), taker trading fees (USDC), DYDX-denominated gas fees from transactions, and USDC-denominated gas fees from transactions for a given block.
Number of DYDX staked by DYDX holder = total DYDX tokens that a dYdX Chain address has staked to (a) validator(s) at a given block.
Total bonded power = the sum of all DYDX that are currently staked by validators to themselves and DYDX staked to validators by DYDX holders.
Staking Rewards = the total portion of the Fee Pool that a DYDX staker can claim at a given block.
Community tax = A tax that directs a percentage of the fee pool to the community pool.
Validator commission rate = commission set by each validator and applied to the staking rewards of each delegator. Validators are required to follow the min_commission_rate parameter but are otherwise free to set their own commission rates.

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Last updated 5 months ago

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Key Concepts and Definitions

Community Pool: a pool of tokens funded by a portion of staking rewards (community_tax) that the dYdX community could use to fund contributor grants, community initiatives, liquidity mining, and other initiatives.

Distribution ModuleAccount Account: an account that collects and distributes trading and transaction fees among validators, delegators, and the community pool.

Staking Rewards: the total portion of the Fee Pool that a DYDX staker can claim at a given block.

Fee Pool: fee pool from maker trading fees (USDC), taker trading fees (USDC), DYDX-denominated gas fees from transactions, and USDC-denominated gas fees from transactions for a given block.

Staking Rewards Withdrawal: a DYDX staker may claim their portion of the Fee Pool for each block. If a DYDX staker does not claim staking rewards, their respective rewards will accrue in the Distribution ModuleAccount Account.

Total Bonded Power: the sum of all tokens that are currently staked by validators to themselves and tokens staked to validators by DYDX holders.

Block Rewards: fees distributed to validators and delegators for successfully proposing and validating a new block on the blockchain.

Parameters

The dYdX Community may adjust these parameters with an on-chain governance proposal.

Title

Value

Description

A tax that directs a percentage of the fee pool to the community pool.

Part of the block reward reserved for the validator that proposes a given block.

Bonus incentive for block proposers based on the number of transactions included in a given block.

True

Whether a delegator can set a different withdrawal address (other than their delegator address) for their rewards.

Staking Rewards

The Cosmos x/distribution module is a simple mechanism to allocate rewards earned by Validators and Stakers. For a detailed understanding of the Cosmos rewards mechanism, read here.

How rewards are distributed on dYdX Chain

DYDX holders who stake to (a) validator(s) are entitled to a portion of the following fees:

DYDX-denominated gas fees from transactions,

USDC-denominated gas fees from transactions,

USDC maker trading fees, and

USDC taker trading fees.

How staking rewards are calculated

Fee Pool = fee pool from maker trading fees (USDC), taker trading fees (USDC), DYDX-denominated gas fees from transactions, and USDC-denominated gas fees from transactions for a given block.

Number of DYDX staked by DYDX holder = total DYDX tokens that a dYdX Chain address has staked to (a) validator(s) at a given block.

Total bonded power = the sum of all DYDX that are currently staked by validators to themselves and DYDX staked to validators by DYDX holders.

Staking Rewards = the total portion of the Fee Pool that a DYDX staker can claim at a given block.

Community tax = A tax that directs a percentage of the fee pool to the community pool.

Validator commission rate = commission set by each validator and applied to the staking rewards of each delegator. Validators are required to follow the min_commission_rate parameter but are otherwise free to set their own commission rates.