Decentralising Dexter with XPRT governance

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An overview of how decentralising Dexter using XPRT governance starts a new flywheel effect within the Persistence Ecosystem.

What has Dexter been up to? (Quick Recap)

With a mission to become the liquidity hub of Persistence, Dexter is an interchain AMM for yield-generating assets. Since its launch in March 2023, Dexter has embarked on a remarkable journey as the pioneering CosmWasm product and the debut DeFi building block on the Persistence core-1 chain. Over the last few months, Dexter has solidified its presence in on-chain activities, achieving over $4.7 million in trading volume and exceeding $13,000 in swap fees. The Dexter community has attracted 2,291 traders and 2,109 liquidity providers who have collectively contributed to a collaborative success story. Notably, Dexter’s Tradoor Rebate Program has generated over $3.5 million in volume to date.

Captured on 5th December 2023

Since its launch, Dexter has established significant XPRT liquidity on Persistence for the first time. Additionally, it introduced an innovative concept of Persistence Community Owned Liquidity (PCOL), empowering Persisters to actively shape and own initial liquidity on new pools. With six vibrant pools and trading options for stkATOM, ATOM, DYDX, USDC, USDT, XPRT, and PSTAKE, Dexter has evolved into a beacon for those seeking more than just liquidity – it offers a community-driven DeFi experience. And this is just the starting point; a lot is in store for Dexter for the coming months, promising a plethora of exciting updates for the Persistence LSTfi ecosystem. Learn more about what’s upcoming for Dexter below:

XPRT’s role in Dexter’s growth so far

XPRT, through its governance power, has been a significant enabler for Dexter’s success. Proposals 15 and 20 approved the Dexter team to upload and instantiate code on the Persistence Core-1 chain permissionlessly.

Beyond its governance prowess, XPRT has proven instrumental in gaining traction. Dexter secured a substantial 450k XPRT grant as a result of Proposal 13 from the XPRT community pool, earmarked for LP incentives aimed at building initial liquidity as well as supporting marketing, business development initiatives, and other operational expenses.

Furthermore, Dexter, via XPRT governance, receives a share of monthly XLB (XPRT Liquidity Bootstrapping) incentives alongside Osmosis, contributing to the successful bootstrapping of deeper XPRT liquidity. This initiative has played a crucial role in early-stage traction on Dexter.

Decentralising Dexter

Dexter, as a CosmWasm product, boasts a codebase uploaded permissionlessly by the admin address whitelisted as a result of Persistence Proposal 15. Currently, the ‘admins’ from both Persistence Labs and the Dexter teams possess the authority to execute specific actions through a multi-sig mechanism. Within this codebase, various smart contracts are designated to tasks such as creating new pools and adding LP rewards. While the adoption of this approach aimed to facilitate a more streamlined and rapid launch, it’s crucial to recognise the inherent Centralization Risk associated with using multi-sig.

In the realm of decision-making for Dexter, there is a compelling case for placing the authority in the hands of Persisters through XPRT governance. Dexter’s sovereignty is most appropriately entrusted to XPRT holders and stakers, governed by the XPRT token. Dexter has already signaled its intention to never introduce its own token for governance, incentivisation, or any other purpose.

The path to decentralising Dexter involves replacing Dexter’s contract admins (multisig addresses) with a new ‘Governance Admin contract.’ This new contract can be triggered solely through on-chain proposals, giving XPRT governance control over actions, such as creating a new pool or rewards schedule, changing fees or pool parameters, and full control over Dexter’s contract. Through this transformation, Dexter achieves decentralisation, aligning more closely with the Persistence ecosystem and concurrently bolstering the power of XPRT governance.

Benefits for the Persistence Ecosystem: A flywheel effect

  1. Increases Alignment

    The decentralisation of Dexter through XPRT governance establishes a closer and more interdependent relationship between Persistence and Dexter. This alignment fosters a stronger connection with the Persistence ecosystem and XPRT stakers.

  2. Mitigates Centralisation Risk

    Deploying and altering contracts through multi-sig arrangements for various actions introduces a potential centralisation risk. The utilisation of XPRT governance serves as a mitigation solution to address and alleviate these risks.

  3. Empowers XPRT Governance

    As explored in the preceding section of this blog, XPRT governance has been instrumental in driving the launch and adoption of Dexter on Persistence.

    Through the decentralisation initiative for Dexter, XPRT stakers acquire increased influence, solidifying their authority in decision-making processes within Dexter. This empowerment positions XPRT stakeholders to truly start steering Dexter in a direction that will make the most sense for the ecosystem.

  4. Increases XPRT token utility

    The XPRT token has played a pivotal role in building traction for Dexter, facilitating liquidity bootstrapping and external incentivisation. The XPRT for Dexter initiative will further enhance the utility of XPRT, solidifying its position as the focal point of activities within the Persistence ecosystem.

  5. Paves the way for other dApps

    Dexter’s sovereignty utilising XPRT governance sets the stage for future dApps to launch seamlessly without the burden of introducing a new token while prioritising protocol features.

‘Dexter for XPRT’ 🤝 ‘XPRT for Dexter’

Dexter opts not to have its own token; rather, it places its reliance on the XPRT token for both sovereignty and traction, aligning seamlessly with the Persistence LSTfi Ecosystem. Dexter plays a vital role in contributing liquidity, user engagement, and on-chain activities to the Persistence ecosystem. In return, Persistence provides Dexter with essential elements such as economic security (staked XPRT), traction (XPRT incentivisation), and sovereignty (XPRT governance), contingent on approval by XPRT governance. This symbiotic relationship not only fortifies the Persistence ecosystem alignment but also sets a precedent for future dApps to launch on Persistence, establishing a foundation of mutual benefit and shared success.

About Persistence

Persistence is a cosmos app chain for LSTfi (liquid staking finance) with the issuance of & DeFi for LSTs.

The Persistence core-1 chain hosts pSTAKE Finance–a multi-chain liquid staking protocol for issuing LSTs that allows users to earn staking rewards while participating in DeFi primitives, Dexter–the Interchain DEX for yield-generating assets like LSTs.

Persistence aims to offer a one-stop shop for liquid staking for PoS (Proof-of-Stake) users and enable developers to build innovative applications around LSTs.

Become a Persister today!

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