[FAQ] What is dapps staking?

Hi everyone! :wave:

When you first read up on Plasm, you would most likely have chanced upon the term “Dapps Staking”. Dapps staking is one of the unique features of Plasm / Shiden that allows us to differentiate ourselves from our competitors.

However from my interactions with the community, it seems like this concept is not very well understood. I understand that it is also hard to imagine what dapps staking is supposed to be like since we’re neither live on Polkadot nor Kusama (as of 18th June 2021) so I am going to try my best to illustrate this to you.


Introduction

In one picture, this is how dapps staking is supposed to work:

How it works

Every smart contract on Plasm / Shiden can be assigned an administrator known as operators. Instead of staking to validators, users can choose to nominate their PLM / SDN tokens to these operators. These users are also known as nominators.

At every block, half of your block rewards are used for dapps staking. This reward is further divided into a 4:1 ratio between operators and nominators i.e. 50% of the block reward goes to validators, 40% goes to operators and 10% goes to nominators.

40% of block rewards is a huge incentive for dapp developers to build on Plasm. In other blockchains like Ethereum, dapp developers need to apply for grant programs, issuance of tokens, fund raising etc. to earn some money but on Plasm, as long as your dapp has been nominated, you will receive some basic income. As your dapp grows in popularity, more members of the community will nominate to you and this means that you will receive a greater percentage of the block reward!

We must also not forget the nominators. 10% reward is quite substantial and can serve as an alternative to staking to validators or lending on other DeFi platforms. Let’s go through a numerical example to really understand this.

Example

I am using PLM in this example but the same logic can be applied for SDN.

  1. Let’s assume that PLM has a price of $1. With a total supply of 70m PLM, this gives PLM a market cap of 70m.
  2. We have 10% inflation a year so that means after 1 year of running the blockchain (assuming no change in price), we would have created 7m USD worth of PLM tokens.
  3. Block rewards are split between validators, dapps and nominators at a 5:4:1 ratio which equates to 3.5m, 2.8m and 0.8m respectively.

If you are able to maintain on average 1% of all nomination, you will receive 28k USD at the end of 1 year. 28k might not sound like much but it is more than enough to cover your basic expenses. It’s our version of universal basic income for operators!

But here’s something even better… what if you could sell your operator position :thinking: Guess what? You can! Imagine if you are an operator to a dapp that holds on average 10% of all nomination, that’s 280k USD of recurring profit annually (at PLM = $1)! Like a traditional business, you can sell this operator position away if you prefer an upfront payment as opposed to having it distributed over a period of time i.e. exiting a company.

I will leave the question of “what is the fair value for PLM” to you since I do not want to speculate on price but I hope that from this example, you can see why we believe in the potential of dapps staking and how by supporting dapp developers natively in our blockchain, we can incentivise more developers to build more amazing dapps for our community!

If you want to try out dapps staking locally, you can follow the instructions in this guide.

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Great explanation! Very simple and clear! :wink:

Hi. What do you think about some kind of verification of dApps to prevent scams and slashes for users?

This verification can be done by Astar Counsil or something like that. It may looks like centralised censorship, but it´s not. Of course, anyone can deploy any dApps but we can mark some dApps as “reliable”, “scam” or “not rated”. It would be very helpful for users.

We can create a directory listing site for all Astar dApps (astarnetwork.app for example). All dApps will be typed (AMM, lending etc.).

On a dApp page:

— dApp description;
— Status according Astar Counsil: “reliable”, “scam”, “not rated”;
— Code audits results if any;
— Users review - more about user experience;
— Estimated dApp staking APY;
— Team;
— Users per day and other useful info.

So the main goals of this site are:

— scams prevention;
— accumulation of information about dApps;
— quolity projects promotion.

Also we can make this site useful for dApp devs by adding tutorials and full Astar documentation.

6 Likes

Great idea!
Thanks for sharing

I like your idea, it could be very helpful! :thinking:
But I don’t like to add a new domain like astarnetwork.app (it can appear malicious…), I suggest to use something like: dapps.astar.network or dappslist.astar.network or something similar… :wink:

Hi. Perhaps my questions will seem obvious and even stupid to you, please don’t blame me, I just want to figure it out.

You start with the fact that users, the same nominators, can choose to give (stake/nominate) their tokens to validators or dapps operators, the same developers

And then you go on to say that half of YOUR block rewards go to dapps staking. But what does “yours” mean? Who am I and where do I get my awards? Or do you mean that I am a user a.k.a. nominator?

If so, ok, let’s move on. But it’s not obvious.

At the beginning, you write that the user has the ability to nominate tokens to dapps operators instead of staking with validators. Further, you write only one scenario, as if the previous choice had no value.

That is, if I, as a user, nominate my tokens in favor of dapp, still 50% of the rewards go to the validator? What does it mean? Why does the validator get a reward if I have nominated coins to the dapp. How will the reward be divided if I stake the tokens to validators?

And the last question. For what is this confusion about dividing the rewards 50 by 50 and then by 4:1, because you can simply say that 10% of the rewards is received by the user, 40% by the dapps operators and 50% by the validators? What reason?

Thanks.

Hi!

Thanks for your questions. Hope I can explain it to you.
Every 12 seconds a block is generated on our chain, every block contains block rewards. 50% of that block reward goes to dApp staking.

This block reward for dApp staking is divided like this:
40% goes to operators aka developers aka project
10% goes to nominators aka the community aka you

Currently it will only be possible to stake on dApps, we are working on the solution to also stake on collators (validators) but this is not high priority.

The data in the post is not correct because it was posted before we integrated the rewards pallat. At every block 50% goes to dApp staking. The other 50% is divided between collators (validators) and treasury. 10% for collators and 40% to treasury.

Hope this answers your questions :-).

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Unas preguntas, resumiendo yo apuesto por ejemplo 20 astar a un proyecto haciendo staking.

¿Se devolverían los 20 astar + una recompensa de la moneda de esa Dapp o pierdes los Astar y te lo devuelven en monedas de ese proyecto?

¿Quanto tiempo estaría retenido en staking mis Astar en ese proyecto? ¿Hay máximo y mínimo de tiempo en el que dura? ¿Sino gana ese proyecto me los devuelven?

¿Se pondrán las Dapp por categorías?¿información completa sobre los proyectos?

Saludos

You won’t lose the Astar/Shiden tokens, and you will always get the rewards.

I have read in information that if I bet on Dapps I will get Astar as a reward. My question is if the option to have rewards (tokens) from the same project will be given.

This can be possible. The nominated project will decide.

Thanks. I look forward to you getting the supply and reward information from the Astar parachain and letting the polkadot auctions begin now. It seems like a mega project to me.

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