💰Trading Incentives
Current epoch (Epoch 7)
Fees: 100% (163,636 $ARB)
Overview
163,636 $ARB (1.8m $ARB in total) is being distributed weekly to traders based on their performance among 4 categories: fees, PnL, PnL (%), loyalty.
These were identified as a balanced set of categories that reward positive behaviors for the protocol (fees & loyalty) and the trader (PnL & PnL (%)), encouraging growth and retention.
The final reward amount can be claimed on-chain shortly after the end of each weekly epoch at: https://gains.trade/portfolio/rewards
Below is a breakdown of each category:
Fees
The fee category incentives are distributed weekly based on open & close fee spending. Traders are rewarded a portion of the rewards based on their share of fees spent. The higher the fee share, the larger the reward.
Trader rewards = traderWeeklyFees / protocolWeeklyFees * weeklyFeesIncentives
Example: The weekly fee incentives are 139,091 $ARB. Trader A pays $500 in fees throughout the week. The protocol earned $250k fees in total. Trader A will receive 500 / 250000 * 139091 = 278.2 $ARB
*Fee category rewards are capped at 75% of the total amount of fees earned by the protocol. Market value of $ARB rewards is determined at time of weekly snapshot. So if weeklyFeesIncentives * ARB/USD > total fees * 0.75
, the distribution will be reduced accordingly.
**Borrowing fee is not included, only action based open & close fees
PnL
The PnL category incentives are distributed weekly based on PnL. Traders are rewarded a portion of the rewards based on their weekly profits. The higher the profit share, the larger the reward. If a trader PnL is negative for the week, it is treated as 0. The protocol weekly PnL is then the sum of all profitable traders, it is not the true PnL (since unprofitable traders PnL is treated as 0).
Trader rewards = max(0, traderWeeklyPnl) / totalProtocolPositivePnl * weeklyPnLIncentives
Example: The weekly PnL incentives are 16,363 $ARB. Trader A profits $5k in pnL throughout the week. The total protocol positive PnL was $250k. Trader A will receive 5000 / 250000 * 16363 = 327.3 $ARB
PnL (%)
The PnL (%) category incentives are distributed weekly based on PnL (%). Traders are rewarded a portion of the rewards based on their weekly PnL percentage. The higher their relative PnL share, the larger the reward. If a trader PnL (%) is negative for the week, it is treated as 0. The protocol weekly PnL (%) is then the sum of all traders with positive percentages.
Trader rewards = max(0, traderWeeklyPnlP) / totalProtocolPnlP * weeklyPnLPercentageIncentives
Example: The weekly PnL (%) incentives are 8,182 $ARB. Trader A relative PnL is 400% throughout the week. The total protocol positive PnL (%) was 12,000%. Trader A will receive 400 / 12000 * 8182 = 272.7 $ARB
Loyalty
The loyalty incentives are distributed weekly based on trading frequency. Each day a trader trades, they earn points towards the weekly distribution. The more fees spent in a day, the more points earned.
Fees | Points |
Min Fee paid $8 | 1 |
Min Fee paid $40 | 5 |
Min Fee paid $200 | 25 |
Min Fee paid $400 | 50 |
Trader rewards = traderWeeklyLoyaltyPoints / totalWeeklyProtocolLoyaltyPoints * weeklyLoyaltyIncentives
Example: The weekly loyalty incentives are 8,182 $ARB. Trader A trades 6 days, 5 of which qualify for points, totaling 105 points throughout the week. The total protocol loyalty points was 12,754. Trader A will receive 105 / 12754 * 8182 = 67.4 $ARB
Daily breakdown:
Day | Fees Spent | Points | Protocol points |
1 | 0 | 0 | 1025 |
2 | 225 | 25 | 1275 |
3 | 59 | 5 | 2400 |
4 | 380 | 25 | 2100 |
5 | 5 | 0 | 1843 |
6 | 612 | 50 | 900 |
7 | 0 | 0 | 3211 |
Total | | 105 | 12754 |
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