Minting Rate
Detailed explanation on the Minting Rate formula.
As trading occurs on the Dexible platform the growth rate of newly issued DXBL tokens will be variable based on a rolling 24hr protocol volume window. The higher the volume, the more difficult tokens are to mint.
The difficulty is set by the Minting Rate (MR), calculated along a volume-based curve and simplified into the 24-hour Volume Window buckets.
Volume Window Calculation
To ensure accurate and up-to-date volume calculations, the protocol utilizes a bucket system that keeps hourly volume totals. Every time a trader is rewarded, the platform deducts the previous 24-hour volume by looking up the volume in the appropriate bucket currentHour - 23Hours. This only happens the first time a trade occurs in any given hour to avoid duplicate deductions.
If this volume exceeds 0, it is deducted from the current total volume. The new volume is added to the current total and the process continues. This system allows for the most accurate volume tracking and ensures that the numbers are constantly updated and reflect the current state of trading activity on the platform.
To calculate volume, the protocol references the Approved Fee Token (either the Wrapped Native Chain token or a Stablecoin) and the token amount. Using the protocol, the Community Vault gets the ChainLink oracle price feed for the specific chain and token to look up the current USD price.
The amount of the fee token is then multiplied by the price to determine the total USD volume. This methodology combined with the bucket system allows for the most efficient and up-to-date volume calculations.
Note: All trade volume is dictated and measured in USD. Those amounts are then truncated to 6 decimal places. This simplification optimizes costs (makes the smart contract more gas efficient by reducing the arithmetic) and improves consistency in calculating the volume.
Using the current Volume Window, we can derive the Minting Rate based on the below formula.
Minting Rate Formula
Where;
| Input | Definition |
|---|---|
SMR | Starting Minting Rate ($100) |
k | Curve Constant(2) |
CV | Current Volume Window (calculated) |
GV | Goal Volume ($1,000,000,000) |
The Minting Rate Curve starts at $100 and increases up to the Goal Volume of $1 billion in daily volumes (the average daily trade volume swapped through Uniswap as of writing). As each window increases in volume, the subsequent trade volume required for the next token to mint rises.
The Starting Minting Rate is a fixed amount at $100 of volume / 1 DXBL set by the team.
The Goal Volume is the maximum target that protocol aims to achieve.
The Current Volume Window means the sum of all 1-hour Bins in the past 24 hours.
The Curve Constant refers to how the Dexible team originally projected minting difficulty expressed on a chart. It's possible to project the exact minting rate for a certain Volume Window following this curve.
Example #1
If today's rolling volume through the protocol is $1,000,000, we can calculate the Minting Rate as
or MR = $100
Example #2
Should volumes increase to $50,000,000 or
Our new Minting Rate would be $158.49.
The growth in Minting Rate continues until a natural supply limit is reached, which occurs at our daily protocol Goal Volume ($1 billion).
To further enhance the efficiency and cost-effectiveness of our on-chain calculations, the protocol has implemented the above curve into more general Volume Buckets. This simplifies the calculations on-chain and significantly reduces gas costs associated with the protocol.
Buckets
The Minting Rate increases along the aforementioned curve, simplified into the below buckets for cheaper on-chain calculations. To follow the Minting Rate curve, MR increases by a percentage per million.
SMR + (SMR x PerMillion x RateIncrease)
Example:
In the range of 1 to 5 million, there is an increase of 0.94% per million. This increase is calculated as follows:
100 + (100 x 1 x 0.94%), then,
100 + (100 x 2 x 0.94%), then,
100 + (100 x 3 x 0.94%), then,
100 + (100 x 4 x 0.94%), and so on.
Beyond 5 million, the increase per million jumps to 0.94%. For a volume of 50 million, the increase is 1.17%, or:
100 + (100 x 50 x 1.17%)
This % per million increase continues for each bucket.
Summary
The Dexible protocol uses a rolling 24-hour volume window to calculate the growth rate of newly issued $DXBL tokens. The Minting Rate, which determines the difficulty of minting new tokens, is calculated on a volume-based curve and simplified into buckets.
The platform uses a bin system to keep hourly volume totals. The bins update every successful trade. To do this, the protocol references the fee token and its USD price to calculate the total USD volume, simplified to 6 digits.
The Minting Rate curve starts at $100 at a $1,000,000 window volume and increases up to a goal volume of $1 billion, with the amount of trade volume required for the next token to mint rising as the volume window increases. The Minting Rate will continue to grow until it reaches a natural supply limit at the goal volume.
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