Stakeholders

This section elaborates on the roles of each stakeholder, all stakeholders contribute to and benefit from the network in a meaningful way. The eventual goal to give sustainable returns while preserving the principal asset, maintaining transparency, and security, the protocol creates a uniform and incentivised network for all participants.

Farm Owner

Farm owners, typically institutions or experienced fund managers, deploy and manage individual Farms—each representing a unique yield-generation strategy. Central to this is the Farm Strategy abstract contract, which standardizes how various strategies are built and upgraded. This abstraction enables farm owners to implement and fine-tune approaches, whether it’s staking, lending, or more innovative methods, while retaining full control over their capital. For instance, the abstract interface is defined as follows:

abstract contract FarmStrategy is Ownable, ReentrancyGuard {
    /// @notice The associated Farm contract.
    address public farm;
    /// @notice The principal asset for this strategy (address(0) for native ETH).
    address public asset;

    event LiquidityDeployed(uint256 amount);
    event LiquidityWithdrawn(uint256 amount);
    event RewardsGenerated(uint256 amount);

    constructor(address _farm, address _asset) {
        farm = _farm;
        asset = _asset;
    }

    /// @notice Deploy liquidity into the strategy.
    function deployLiquidity(uint256 amount) external virtual payable;
    
    /// @notice Withdraw liquidity from the strategy.
    function withdrawLiquidity(uint256 amount) external virtual;
    
    /// @notice Harvest generated rewards from the strategy.
    function harvestRewards() external virtual returns (uint256);
}

This modular design ensures that farm owners can easily integrate or update their strategy logic without disrupting the overall protocol, enabling continuous innovation and operational transparency.

The number of Farms registrations are limited and exclusive in order to maintain the performance and quality of the strategies, only the most performant farms in terms of the consistency and reward generation will remain on the network.

Liquidity Providers

Liquidity providers or Investors are the primary beneficiaries of the protocol’s incentive mechanism. By allocating their capital to their chosen Farm in the form of that Farm's principal asset, LPs participate in yield-generating strategies tailored to their preferences.

1. Rewards and Returns

• Instant Rewards: Upon allocation, LPs receive instant rewards in $DXP tokens as an incentive for their participation.

• Return Mechanics: While all farms generate returns in the input asset, these returns are typically unlocked at the contract's maturity.

• Pre-Mature Exit: If an LP opts to terminate their participation before maturity, they are required to return the rewarded $DXP and will incur a fee deducted from the yield generated during their tenure.

1. Compliance and KYC Requirements For farms requiring compliance with KYC regulations, LPs must acquire a Draft NFT. This facilitates the generation of a Soulbound NFT linked to the LP’s wallet address, ensuring their eligibility to participate while adhering to regulatory requirements.

2. Transparency and Optimization LPs benefit from transparent performance metrics provided by the protocol, allowing them to monitor and optimize the utilization of their investments effectively.

3. Profit Allocation The majority of the returns generated by the protocol’s yield strategies are allocated to LPs, solidifying their role as the primary beneficiaries within the ecosystem and aligning the protocol’s success with their financial growth.

Yield Yodas

Yield Yodas’ are masters of the yield force, skillfully guiding capital toward higher returns with precision and wisdom. In less playful terms, they are Yield Originating Entities (YOEs)— the foundational drivers of yield generation within the protocol. These entities provide the active work required to sustain the yield generation within the farm, where the mechanism may differ.

1. Yield Generation Mechanisms Yield Yodas encompass a diverse array of yield-generating strategies, including:

   • Proof-of-Stake Validators: For example, staking on Ethereum.

   • Collateralised Debt Obligations (CDOs): Used for stablecoin minting.

   • Automated Market Maker (AMM) Pools: Liquidity pools facilitating decentralized trading.

   • Lending and Borrowing Pools: Mechanisms to generate returns through interest-based transactions.

2. Performance Optimisation and Monitoring The protocol employs a rigorous ranking and weighting system, managed by verifiers, to ensure optimal performance and equitable liquidity distribution across Yield Yodas. Key aspects include:

3. Dynamic Competition: Performance is monitored on a block-by-block basis, creating a competitive environment where only the most efficient and reliable Yield Yodas retain their positions. Underperforming entities are systematically removed from the network to maintain high standards of yield generation.

4. Customisable Deployment: Each farm may deploy between 1 to y Yield Yodas, with the value of y defined by the Farm Owner based on their strategy and objectives.

5. Purpose-Driven Functionality The protocol's emphasis on real-time monitoring and competition ensures that liquidity is directed to the most effective Yield Yodas, aligning performance with investor returns and reinforcing the protocol's commitment to transparency and efficiency.

Verfiers

Verifiers are tasked with running the Sharpe Consensus mechanism, which serves a similar technical function to the Yuma Consensus used in the AI-DePIN[5] incentivisation framework pioneered by Bittensor. As the backbone of the protocol's decentralisation, Verifiers play a pivotal role in maintaining the network’s integrity. Their key responsibilities include:

• Performance Monitoring: Actively validating the performance of Yield Yodas to ensure transparency and sustained efficiency.

• Intelligent Benchmarking: Setting performance benchmarks using advanced AI algorithms to incentivise high-performing strategies.

• Liquidity Allocation: Distributing liquidity among Yield Yodas based on their performance metrics and APY targets.

Verifiers maintain the protocol’s integrity through continuous oversight. By staking $DXP tokens and submitting performance proofs, they enforce the Sharpe Consensus—a mechanism that uses statistical and AI-driven benchmarks to validate yield performance. Their submissions, such as:

function submitProof(uint256 farmId, uint256 performanceScore) external nonReentrant {
    require(registeredVerifiers[msg.sender], "Not a registered verifier");
    require(farmApprovedVerifiers[farmId][msg.sender], "Verifier not approved for this farm");
    require(performanceScore > 0, "Invalid performance score");
    emit ProofSubmitted(msg.sender, farmId, performanceScore);
    
    uint256 totalIncentives = performanceScore; // Simplified incentive logic.
    dxpToken.emitTokens();
    emit IncentivesDistributed(totalIncentives);
}

not only trigger performance-based token emissions but also ensure that underperforming yield yodas are removed and that liquidity flows only to effective strategies. Misbehaving verifiers face slashing, ensuring high standards and alignment with overall network performance.

To ensure accountability, the protocol requires Verifiers to stake $DXP tokens. This staking acts as a deterrent against malicious behavior, with penalties such as slashing imposed for dishonest attestations—although the specific slashing criteria are yet to be defined. Farm Owners can also supervise Verifiers to provide an additional layer of oversight.

Verifiers are compensated for their critical role in the protocol’s operations through a share of the returns generated (in $DXP tokens), aligning incentives and ensuring their continued commitment to maintaining the system.