Plans are underway to deploy the Dev Protocol to L2 (Optimistic Rollups), and all the changes for deploying to L2 have been developed. But there are some considerations, and I would like to discuss them.
Repo: GitHub - dev-protocol/protocol-l2: 🗞️ Dev Protocol for Optimistic Rollups
What do you think that the APY is lower than L1 at the beginning of L2?
Unlike many sidechains, L2 is the best scaling solution for Dev Protocol in that it has the security of L1.
However, L2 is not the same as L1 and looks like a different chain to L1 from smart contracts.
In Dev Protocol, there are the following differences between L1 and L2:
- L1 has non-circulating supplies such as ecosystem funds, and L2 does not.
- L1 has 1,644 Property tokens (a.k.a Creator tokens), but L2 does not.
Due to these differences, the beginning of L2 offers a lower APY than the L1. This is because APY is determined by “total supply to staking ratio (higher brings lower APY)” and “number of assets (higher brings higher APY).” L2 has a higher staking ratio than L1 and fewer assets than L1.
Dev Protocol’s Policy contract is the most important part of controlling APY and is controlled by governance. Use different policies for L1 and L2 to eliminate the difference.
- Staking ratio: Increase the reward per asset.
- The number of assets: Use a virtual number of assets.
Increase the annual reward amount per asset. Use the L1’s annual reward amount per asset just before being deployed in L2 so that L2’s policy can calculate the near value of L1’s annual reward amount by the ratio of circulating supply to staking at that time.
Currently, the annual reward per asset of about 304,790 at the total supply to staking ratio of 5.08%. To reach this value at a circulating supply to staking ratio of 32.42%, L2’s Policy will use 0.00007 as the maximum reward per asset and second. *In L2, seconds are used as the time unit instead of the block number (=increases every 15 seconds in L1), so 1 year is calculated as 31,536,000 seconds.
Virtually uses the number of L1 assets just before being deployed in L2. And the increase in assets does not affect APY until the actual number of assets reaches the virtual number. In other words, the number of assets is always treated as 1,644 in L2 until the number of assets exceeds 1,644 (currently).
I hope L1 and L2 are as fair as possible and work with few changes. I welcome your feedback!